Summary of Comments on Consultation Paper 09 - EIOPA-CP-009/2011
CP No. 009-SII Reporting - Quantitative Reporting - Reinsurance
04 July 2012
EIOPA would like to thank Afa Sjukförsäkring, AFA Trygghetsförsäkring, AFA Livförsäkring, Audit&Consulting Services – Poland, AM Best,
AMICE, ANIA Reinsurance Working Group, Association of British Insurers (ABI), Association of Financial Mutuals (AFM), AXERIA PREVOYANCE
– AXERIA IARD – SOLUCIA, Barnett Waddingham, BVI Bundesverband Investment and Asset Management, Insurers Europe (CEA), CFO
Forum & CRO Forum, Crédit Agricole Assurances, CTIP (the French Paritarian Institution), Czech Insurers Association, Danish Insurance
Association, Deloitte Touche Tohmatsu, European Captive Insurance and Reinsurance Owners, Federation of Finnish Financial Services, FEE,
FNMF - Fédération Nationale de la Mutualité, Foyer S.A., German Insurance Association (GDV), Groupe Consultatif, HSBC Securities Services,
ICMA Asset Management and Investors Council, ILAG, ING Group Data modelling team, Investment Management Association (IMA), If P&C,
Institut des Actuaires, JP Morgan, KPMG, Lloyd’s, NFU Mutual, Paul Figg (individual, actuary), PwC, Royal London Group, RSA Insurance
Group plc, State Street Corporation, The Alternative Investment Management Association Ltd (AIMA), The Directorate General Statistics (DGS) of the ECB, The International Group of P&I Clubs, The Phoenix Group, Thomas Miller & Co Ltd, UNESPA – Association of Spanish Insurers
and XL Group plc
The numbering of the paragraphs refers to Consultation Paper No. 09 (EIOPA-CP-009/2011)
No.
Name
Reference
IRSG
General
comments
(Part II)
Comment
Resolution
1) Regarding reinsurance templates (especially J2 and J3), the level
of detail is particularly burdensome and costly beyond the benefit
of such analysis. Consideration should be given to reducing the
amount of treaty level detail and perhaps replacing it with
graphical representations of the reinsurance programme at the
balance sheet date.
2) Template J2 requires disclosure of individual reinsurance treaties,
which is overly granular and burdensome for those territories that
have not previously reported to this level of granularity. IRSG
would recommend a threshold instead, consistent with the
1)
Without the
requested additional
information
collected data might
not be properly
processed and
therefore would not
be useful. A correct
management of the
underwriting risks
depends on this
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approach taken for template J1 facultative insurance.
information.
Decision has been
taken not to base
reporting on a
material threshold
or proportionality, to
allow data to be
significant and
properly usable as a
whole.
3) Facultative risks are
exceptional risks
which must be
administered very
well. A correct
management of risk
depends on this
information.
Unfortunately initial
operational costs
cannot be
prevented. Without
the requested
additional
information
collected data might
not be properly
processed and
therefore would not
be useful.
2)
3) IRSG also believes that similarly to the J1 template that only
includes the 10 most important risks; a threshold at business
level would be welcome. IRSG notes however that a significant
amount of work would be required to identify the ten policies with
biggest net share of risk capital across each line of business.
Template J3 requires broker details for outward reinsurance
exposure. This is burdensome and would need the disaggregation of
reinsurer counterparty exposures when business introduced through
more than one channel / broker and IRSG wonder if this information
is very useful. Consideration could instead be given to narrative
disclosure on the insurers’ dependence on individual brokers
4) We need the
specification of the
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name of the Broker,
to assess the
counterparty risk
related to the
specific reinsurer,
and the name of the
reinsurer, to know
to which
intermediary the
transfer of risk has
been outsourced.
1.
RSA Insurance
Group plc
Re – J1Benefits
2.
German Insurance
Association (GDV)
Re – J1- cell
A00
See “General” above.
Agree.
We assume the LOB category to be reported on reinsurance is the
LOB of the underlying insurance risk. As the reinsurance reporting is
from the viewpoint of the ceding undertaking, this would be the LOB
of the insurance contract for which the risk is ceded.
For example: A reinsurance agreement between a Life insurer (the
cedent) and a Reinsurer on an insurance coverage of type Life: Index
linked and unit-linked. For the Ceding company this is reinsurance on
the LOB Index linked and unit linked. The Reinsurer would look at the
same contract from the point of view of the reinsurer and classify the
contract as Accepted reinsurance, however as this report is based on
the viewpoint of the ceding company the reported LOB will be Indexlinked and unit-linked.
This comment also applies to l TP-E7A – cell D1, Re – J1 – cell A01
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and Re – J2 – cell H1.
3.
ING Group Data
modelling team
Re – J1- cell
A00
To be confirmed : We assume the LoB category to be reported on
reinsurance is the LoB of the underlying insurance risk. As the
reinsurance reporting is from the viewpoint of the ceding
undertaking, this would be the LoB of the insurance contract for
which the risk is ceded.
Agree.
Example: A reinsurance agreement between a Life insurer (the
cedent) and a Reinsurer on an insurance coverage of type Life :
Index linked and unit-linked. For the Ceding company this is
reinsurance on the LoB Index linked and unit linked. The Reinsurer
would look at the same contract from the point of view of the
reinsurer and classify the contract as Accepted reinsurance, however
as this report is based on the viewpoint of the ceding company the
reported LoB will be Index-linked and unit-linked.
Same applies to cell TP-E7A – D1, Re – J1 – A01 and Re – J2 – H1.
4.
The Phoenix Group
Re – J1- cell
A00
Is ‘Line of Business’ that defined in the TP-F1 template (closed list)?
LoB as to be defined in
the final level 2 text.
5.
Association of
British Insurers
(ABI)
Re – J1- cell
A01
The definition is given as ‘LoB as defined for Solvency II purposes’.
This suggests the 8 way split of business as given in Sections D & E
of Annex I to the Revised Draft Implementing measures released 31
October 2011.However the example given still follows the definitions
laid out in the previous version of the Draft Implementing measures.
To avoid confusion, the example should be amended to tie in with the
latest revision, e.g. Insurance With Profit Participation.
Agree.
Example
amended in final LOG.
6.
CFO Forum & CRO
Forum
Re – J1- cell
A01
The definition is given as ‘LoB as defined for Solvency II purposes’.
This suggests the 8 way split of business as given in Sections D & E
of Annex I to the Revised Draft Implementing measures released 31
October 2011.
Agree.
Example
amended in final LOG.
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However the example given still follows the definitions laid out in the
previous version of the Draft Implementing measures.
To avoid confusion, the example should be amended to tie in with the
latest revision, eg Insurance With Profit Participation.
7.
German Insurance
Association (GDV)
Re – J1- cell
A01
Clarification would be helpful as to whether the LOB is to be defined
as the primary insurance LOBs. If this is not the case, supervisory
guidance will be necessary.
LOB is defined for
primary insurance and
accepted reinsurance.
Supervisory guidance is
provided in the LOG.
8.
Crédit Agricole
Assurances
Re – J1- cell A1
Will the name of reinsured entity be defined by EIOPA? If so, when
will this information be released?
EIOPA will develop a
reinsurers
database.
This will guarantee a
harmonisation of the
name and codes used
for
each
reinsurer
entity.
9.
Czech Insurers
Association
Re – J1- cell A1
A1,B1,C1,SPV - What does “only for group” in the Name of the
Company mean? On which level are we suppose to fill the companies
in?
10.
Deloitte Touche
Tohmatsu
Re – J1- cell A1
If codes are to be provided by EIOPA, it will need to be clarified how
EIOPA will develop this database, one option is to request companies
to send in details of the counterpary in advance for EIOPA to develop
the codes. If this is the option chosen then a timeline will need to be
put in place to allow companies gather the relevant data and an
indication of when the codes will be made available frion EIOPA.
11.
RSA Insurance
Group plc
Re – J1- cell A1
As this form is no longer applicable to groups, this cell should be
deleted.
Template is not
applicable for groups,
column will be
removed.
Noted. A codification for
reinsurer is actually
envisaged. The process
will be defined later.
See also comment 8. .
Template
applicable
is
not
for groups,
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column
removed.
will
be
12.
Deloitte Touche
Tohmatsu
Re – J1- cell
A11
If codes are to be provided by EIOPA, it will need to be clarified how
EIOPA will develop this database, one option is to request companies
to send in details of the counterpary in advance for EIOPA to develop
the codes. If this is the option chosen then a timeline will need to be
put in place to allow companies gather the relevant data and an
indication of when the codes will be made available frion EIOPA.
See comments 8. and
10. .
13.
The Phoenix Group
Re – J1- cell
A11
Is this field now redundant? As template is not required at Group
level?
Template
applicable
column
removed.
14.
German Insurance
Association (GDV)
Re – J1- cell
AA11
For “Facultative ceded Reinsurance Premium” and “Facultative
Reinsurance Commission”, we question the supervisory purpose for
requesting this information as we do not believe it is relevant for
evaluating the effectiveness of the reinsurance program.
We propose to delete the word “reinsurance” from the LOG definition.
is
not
for groups,
will
be
1) Premium and costs
are the elements
through which the
reinsurance cover
can be judged.
2) Don’t agree.
Premium will be
booked as
reinsurance
premium.
15.
The Phoenix Group
Re – J1- cell
AA11
Can you please confirm whether this is commission due to the
Reinsurer?
Commission to be paid
by the reinsurer being
part of the reinsurance
premium to be received
by reinsurer.
16.
Federation of
Finnish Financial
Services
Re – J1- cell
AB1
Remove “reinsurance” from the definition in LOG document to make
it clearer.
Column header will be
“Facultative reinsurance
premium” and the LOG
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was adapted.
17.
German Insurance
Association (GDV)
Re – J1- cell
AB1
For “Facultative ceded Reinsurance Premium” and “Facultative
Reinsurance Commission”, we question the supervisory purpose for
requesting this information as we do not believe it is relevant for
evaluating the effectiveness of the reinsurance program.
We propose to remove “reinsurance” from the definition in LOG
document to make it clearer.
18.
AMICE
Re – J1- cell B1
LOG document states the “Reinsurace program code” as an Unique
code (undertaking specific) covering all individual reinsurance
placements which belong to the same reinsurance program.
1) Premium and costs
are the elements
through which the
reinsurance cover
can be judged.
2) Column header will
be “Facultative
reinsurance
premium” and the
LOG will be adapted.
Agree. EIOPA provides
examples in final LOG.
We welcome EIOPA´s agreement to introduce entity´s codes to avoid
incorrect legal names of involved entities. It would be helpful if
EIOPA provides some examples.
19.
Czech Insurers
Association
Re – J1- cell B1
B1,C1,D1 - It is unclear whether these codes will be determined by
the undertaking or EIOPA; clarification would be helpful on this
matter.
Codes are undertaking
specific and therefore
must be determined by
the undertaking.
20.
AMICE
Re – J1- cell
B11
We welcome EIOPA´s agreement to introduce entity´s codes to avoid
incorrect legal names of involved entities. It would be helpful if
EIOPA provides some examples.
Agree. EIOPA provides
examples in final LOG.
21.
Crédit Agricole
Assurances
Re – J1- cell C1
Risk identification code (C1) : based on our understanding, it is
outlined that a facultative covers a unique risk. If a facultative covers
several risks, how could we deal with this information? Should the
main risk covered by the facultative be reported?
If
a
facultative
placement
covers
several risks which are
not correlated, these
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risks
must
unbundled.
22.
Deloitte Touche
Tohmatsu
Re – J1- cell C1
This description of the materiality threshold is not very clear –
wording should to be clarified. As it reads now it is not clear if if
refers to the top 10 treaties in terms of risk exposure? Or the top 10
overall reinsurance risks in which the Fac agreement may or may not
fall.
Consider wording to read “By selecting the 10 most significant
facultative agreements in terms of reinsured exposure……….. in case
of a signle risk event”
23.
German Insurance
Association (GDV)
Re – J1- cell C1
We believe that the LOG definition is unclear.
Further clarification required:
What is the purpose of the unique code in C1 compared with
the unique code in cell B1?
The text in the LOG suggests all items that have been in force
at any point in the reporting period not just those in force for the full
period, as described in the general comment for this template, should
be included. Clarification would be helpful on this point.
be
See also definition in
the general comment of
the LOG: For each LoB,
a selection must be
made of the 10 most
important risks in terms
of reinsured exposure
meaning
the
sum
insured that the insurer
has reinsured on a
facultative basis.
1) EIOPA has improved
the LOG.
2) Further clarification:
a) B1 is a unique
undertaking
specific and
identifying
number for the
risk accepted. C1
is reflecting the
sequence
number of the
facultative
placement.
b) J1 will give on a
prospective basis
all covers that
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start in the
coming year
(active on 1/1 or
after) including
the risks that are
underwritten but
not have been
started when
filling the
template. J1 will
be resubmitted
at the end of the
year if actual top
10 covers,
started during
the year, differ
from what was
expected in
initial J1.
24.
Deloitte Touche
Tohmatsu
Re – J1- cell
C11
The threshold is not very clear – wording to be clarified that this is
the top 10 lives reinsured in terms of risk exposure?
See also comment 22.
25.
German Insurance
Association (GDV)
Re – J1- cell
C11
We believe that the LOG definition is unclear.
See also comment 23.
Further clarification required:
What is the purpose of the unique code in C1 compared with
the unique code in cell B1?
The text in the LOG suggests all items that have been in force
at any point in the reporting period not just those in force for the full
period, as described in the general comment for this template, should
be included. Clarification would be helpful on this point.
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26.
ANIA Reinsurance
Working Group
Re – J1- cell D1
Please clarify if this identification code can be copied or splitted in the
Template, as to represent different facultative placements concerning
different policies which constitute the same risk.
If
a
facultative
placement within one
LoB covers several risks
which
are
not
correlated, these risks
must be unbundled by
the identification code.
27.
German Insurance
Association (GDV)
Re – J1- cell D1
It is unclear whether these codes will be determined by the
undertaking or EIOPA; clarification would be helpful on this matter.
Code is undertaking
specific and therefore
must be determined by
the undertaking.
28.
German Insurance
Association (GDV)
Re – J1- cell H1
We are concerned over the level of detail required in this template, in
particular for facultative policies covering property portfolios. Would
this be required at individual building level? If so, this would create
some significant issues with regards to data privacy and
commercially sensitive information.
The principle is to
reflect the individual
underwriting risk which
means for property at
the
level
of
an
individual building. This
in
line
with
the
determination of the
Net SCR for catastrophe
risks.
29.
Crédit Agricole
Assurances
Re – J1- cell
H11
Could you clarify the LOA definition in the LOG : « Line of activity
representing the main cover of the treaty »? Indeed, this template is
dedicated to facultative covers. In that case, should the required line
of activity be the one of the main risk covered?
See examples in the
LOG. Please note that
this column is entity
specific
and
not
obligatory.
30.
German Insurance
Association (GDV)
Re – J1- cell
H11
What is to be understood by “line of activity”? How to differentiate
between LOB and HRG according to Solvency II?
See examples in the
LOG. Please note that
this column is entity
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specific
and
obligatory.
not
31.
The Phoenix Group
Re – J1- cell
H11
A policy could have more than one risk type, Does that mean that
we would split the policy across multiple lines in the QRT.
Yes, this depends on
the
cover.
Some
individual risks must be
unbundled and might
appear in more LOBs.
32.
Crédit Agricole
Assurances
Re – J1- cell I1
Is there a link between LOA (Line of Activity) and a LOB (Line of
Business)? If no, would such a connection be provided upon level 2
measures publication?
This
is
undertaking
specific and gives the
undertaking
the
possibility to specify the
cover of the risk for a
specific internal sub line
of business.
33.
German Insurance
Association (GDV)
Re – J1- cell I1
We query what should be included under “line of activity”? Further
guidance should be given as to whether this is a sub-category of “line
of business”
1) This is undertaking
specific and gives
the undertaking the
possibility to specify
the cover of the risk
for a specific
internal sub line of
business. The LOG
will be clarified.
The text in the LOG refers to “treaty” which is not relevant for
facultative reinsurance, this should be corrected.
Our understanding of the expression “entity specific” is that the
undertaking would be free to use whatever description is used in its
database to better qualify the risk. More guidelines on this issue
would be appreciated.
What is to be understood by “line of activity”? How to differentiate
between LOB and HRG according to Solvency II?
2) Text has been
adapted
3) Undertaking is free
to use any
description.
4) It gives the
undertaking the
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possibility to specify
the cover of the risk
for a specific
internal sub line of
business. A HRG
might consist of
risks bundled from
several LOBs.
34.
KPMG
Re – J1- cell I1
The template requires disclosing the line of activity representing the
main cover of the facultative risk. We would expect more guidance or
clarification from EIOPA (e.g. examples included in RE-J2)
This is undertaking
specific and gives the
undertaking the
possibility to specify the
cover of the risk for a
specific internal sub line
of business.
35.
RSA Insurance
Group plc
Re – J1- cell I1
The purpose of this is not understood at all – analysis by SII LoB is
sufficient.
Cell is not obligatory
but
gives
the
undertaking
the
possibility to specify the
cover of the risk for a
specific internal sub line
of business. LOG will be
clarified.
36.
Czech Insurers
Association
Re – J1- cell L1
We query how to report the slips monitored in multiple currencies or
in case when opening balance of the slip is reported in different
currency than reinsurance provision.
In case of multiple
currencies the currency
of
the
maximum
exposure must be filled.
37.
German Insurance
Association (GDV)
Re – J1- cell L11
As parts of the portfolio are assessed approximately by using specific
assumptions, differentiation per LOB may be difficult.
Noted.
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38.
Czech Insurers
Association
Re – J1- cell M1
SI – are we supposed to report sum insured or indemnity limit.
Definition “highest amount that the insurer can be obliged to pay
out” more indicates to report indemnity limit. And also query whether
there should be reported actual amount of SI (life) here, because it
can differ in next periods as it depends on the clients aging.
In
case
the
SI
fluctuates the actual
amount
must
be
reported.
39.
German Insurance
Association (GDV)
Re – J1- cell M1
We do not believe that reporting the whole sum insured would be
helpful for describing risk. For example, multiple businesses in
multiple cities.
1) In this example the
risks
must
be
unbundled.
2) Further clarification:
Further clarification required:
We query whether the sum insured refers to each risk, for
example location, or by an event?
Does sum insured include deductibles?
a) The principle is
to reflect the
individual
underwriting risk
which means for
property at the
level
of
an
individual
building.
b) The
original
deductible of the
policyholder
must
not
be
deducted
from
the sum insured.
40.
German Insurance
Association (GDV)
Re – J1- cell
M11
Risk capital is defined as insured capital less provision for insurance
liabilities; it is not clear whether the insurance liabilities are based on
Best Estimates or Best Estimates + Risk Margin or some other
definition. Clarification would be helpful.
Risk capital is insured
capital less amount for
technical
provisions
based
on
best
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estimates.
41.
The Phoenix Group
Re – J1- cell
M11
Risk capital is defined as insured capital less provision for insurance
liabilities; it is not clear whether the insurance liabilities are based on
Best Estimates or Best Estimates + Risk Margin or some other
definition. Clarification would be helpful.
Calculations will be completed at a higher (i.e Fund) level. Will
approximations be allowed?
42.
Federation of
Finnish Financial
Services
Re – J1- cell N1
Definitions in LOG are too detailed, for example EML:
The Solvency II statement (LOG document) is not compatible with
the way in which we calculate a fire EML for properties. The essential
difference is that we do not take in to account all factors likely to
lessen the extent of the loss.
For example, in our EML estimates no allowance is made of active fire
protection systems, such as sprinkler protection. Taking in to account
all factors likely to lessen the extent of the loss would be more
consistent with our Normal Loss Expectancy (NLE) assessment.
1) Risk
capital
is
insured capital less
amount for technical
provisions based on
best estimates.
2) Approximations are
allowed but must be
consistent with the
calculations of the
technical provisions
based on the best
estimates.
The current definitions
used by EIOPA in the
LOG resulted after a
thorough market wide
investigation by a major
reinsurer broker. The
definitions for MPL and
EML
were
formal
accepted by CEA in
1999 and the definition
for PML is generally
accepted by insurers,
reinsurers
and
reinsurance brokers.
To the best of our knowledge, our method of assessing the fire loss
potential to property at a site is consistent with property loss
assessment techniques used by all property insurance companies.
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Although the terms EML and NLE may vary between companies, the
disregard of active protection systems is a fundamental aspect of the
EML assessment.
43.
German Insurance
Association (GDV)
Re – J1- cell N1
In some cases, Facultative reinsurance covers more than one
Solvency II LOB. In such cases, splitting SI or PML would not be
straightforward.
This template refers to PML, where “normal functioning of prevention
measures” are assumed. In cases, undertakings underwrite their
business using an evaluation method (EML = estimated maximum
loss), where such measures are not assumed, thereby being more
prudent. Having to report using PML would therefore not reflect the
way the business is run, meaning significant changes to data just for
the purpose of supervisory reporting. The principle of reporting
information should be consistent with the way the business is run.
Also, we do not find that the LOG is compatible with the way in which
undertakings calculate EML. The essential difference is that
undertakings do not take in to account all factors likely to lessen the
extent of the loss. For example, when calculating a fire EML for
property – inEML estimates, no allowance is made of active fire
protection systems, such as sprinkler protection. Taking in to account
all factors likely to lessen the extent of the loss would be more
consistent with Normal Loss Expectancy (NLE) assessment.
Although the terms EML and NLE may vary between undertakings,
the disregard of active protection systems is a fundamental aspect of
1) Facultative cover
must be filled per
LOB, splitting the
corresponding data
reflecting the risk
per LOB.
2) EIOPA described a
default definition for
EML and PML based
on best practice in
the industry.
Undertaking specific
definitions must be
clarified in the
Narrative report
under Underwriting
Risk (Section C Risk profile).
3) Definitions are
based on broker’s
information. The
definitions for MPL
and EML have been
accepted by CEA in
1999.
4)
The use of an
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the EML assessment.
We would ask that EIOPA clarify that the definitions used are
consistent with accepted terminology.
The LOG refers to the situation where a PML is not applicable to a
LOB. We would ask that EIOPA provide details of the LOB to which
PML (or EML) would not be applicable.
Further clarification required:
We query if data on the PML relates to the original cover or to
the reinsurance.
44.
KPMG
Re – J1- cell N1
The template requires disclosing the type of underwriting model.
There is no explicit guidance in relation to the closed list of different
models provided by EIOPA.
MP/PML/EML model
is not obligatory but
the result of (local)
common practice
and therefore can
not be prescribed
per LOB.
5) Clarification:
a) The amount of
PML relates to
the sum insured
of the
underwriting risk
and is an
estimation of the
exposure where
the reinsurance
protection is
based on.
Over 90 definitions of
the underwriting models
are
used
in
the
insurance
sector.
Definitions
used
by
undertakings which are
not in line with the
definitions described in
the
LOG
must
be
clarified in the Narrative
report
under
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Underwriting
(Section
C
profile).
-
Risk
Risk
45.
RSA Insurance
Group plc
Re – J1- cell N1
The LOG states that the purpose of this cell is to assess the net
retention – but this is impossible to do without an understanding of
any other (non-facultative) covers in place. Given that the form does
not actually ask for the net retention and considering E7A already
requests such information by LoB, we believe this is not needed at
all.
Agree that the purpose
of this cell is not
correct.
Type
of
underwriting model is
needed to evaluate the
estimated
exposure
where the purchase of
facultative reinsurance
is based on.
46.
Deloitte Touche
Tohmatsu
Re – J1- cell
O11
If codes are to be provided by EIOPA, it will need to be clarified how
EIOPA will develop this database, one option is to request companies
to send in details of the counterpary in advance for EIOPA to develop
the codes. If this is the option chosen then a timeline will need to be
put in place to allow companies gather the relevant data and an
indication of when the codes will be made available frion EIOPA.
See also comment 10.
47.
Crédit Agricole
Assurances
Re – J1- cell Q1
When will EIOPA communicate the reinsurers’ codes? Will that list
provide all Reinsurers’ names, or give the detail with all the entities
of these groups?
48.
Czech Insurers
Association
Re – J1- cell Q1
Q1,W1 - It is unclear whether these codes will be determined by the
undertaking or EIOPA; clarification would be helpful on this matter.
49.
Deloitte Touche
Tohmatsu
Re – J1- cell Q1
If codes are to be provided by EIOPA, it will need to be clarified how
EIOPA will develop this database, one option is to request companies
to send in details of the counterpary in advance for EIOPA to develop
the codes. If this is the option chosen then a timeline will need to be
put in place to allow companies gather the relevant data and an
indication of when the codes will be made available frion EIOPA.
50.
German Insurance
Re – J1- cell Q1
Including additional fields such as this will increase costs.
See also comment 10.
See also comment 10.
See also comment 10.
1) Without the
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Association (GDV)
We query how the list of codes will be maintained and what
contingency will be in place should a code not exist for a particular
reinsurer.
51.
RSA Insurance
Group plc
Re – J1- cell Q1
Details on such codes need to be produced as soon as possible (how
these will be made available and by when), to help undertakings
develop their processes.
52.
Deloitte Touche
Tohmatsu
Re – J1- cell
U11
If codes are to be provided by EIOPA, it will need to be clarified how
EIOPA will develop this database, one option is to request companies
to send in details of the counterpary in advance for EIOPA to develop
the codes. If this is the option chosen then a timeline will need to be
put in place to allow companies gather the relevant data and an
indication of when the codes will be made available frion EIOPA.
53.
Deloitte Touche
Tohmatsu
Re – J1- cell W1
If codes are to be provided by EIOPA, it will need to be clarified how
EIOPA will develop this database, one option is to request companies
to send in details of the counterpary in advance for EIOPA to develop
the codes. If this is the option chosen then a timeline will need to be
put in place to allow companies gather the relevant data and an
indication of when the codes will be made available frion EIOPA.
54.
German Insurance
Association (GDV)
Re – J1- cell W1
Including additional fields such as this will increase costs.
We query how the list of codes will be maintained and what
contingency will be in place should a code not exist for a particular
broker.
requested additional
information
collected data might
not be properly
processed and
therefore would not
be useful.
2) See also comment
10.
See also comment 10.
See also comment 10.
See also comment 10.
1) Without the
requested additional
information
collected data might
not be properly
processed and
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therefore would not
be useful.
2) See also comment
10.
55.
RSA Insurance
Group plc
Re – J1- cell W1
We do not understand why this is being requested when the
reinsurer’s details are requested elsewhere on the form. If the
purpose is to assess “possible counterparty risk”, there would appear
to be duplication of a) the SFCR/RSR disclosures on such risks and b)
(for groups) the RC template. If such risks are material, they will be
reported in those places; otherwise, they are not worth reporting at
all. In either case, this cell does not enhance the supervisory process.
See cell Q1 above also.
Reinsurance
brokers
play a very important
role in the reinsurance
market. Their activities
may
generate
a
substantial outsourcing
risk which must be
measured
by
the
undertaking
and
monitored
by
the
supervisor.
The
SFCR/RSR is too high
level to evaluate the
importance
for
the
specific undertaking and
also the information
cannot be aggregated
for market analyses.
56.
Association of
British Insurers
(ABI)
Re – J1- cell
W11
It is essential to understand whether this is going to be a closed list
selected by EIOPA or not. Please clarify this.
This will be a closed list
where codes can be
combined.
57.
CFO Forum & CRO
Forum
Re – J1- cell
W11
It is essential to understand whether this is going to be a closed list
selected by EIOPA or not. Please clarify this.
This will be a closed list
where codes can be
combined.
58.
RSA Insurance
Group plc
Re – J1- cell Z1
For Excess of Loss contracts, this field is meaningless. The formula in
cell AA1 does not work in this situation either. Clarification is needed
Don’t understand
remark.
Share
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the
of
for such (common) cases.
reinsurer is needed to
evaluate the exposure
transferred
to
the
specific reinsurer and
the resulting credit risk.
59.
Deloitte Touche
Tohmatsu
Re – J1- Costs
Initial costs to develop the systems to report the information may be
burdensome on smaller entities due amount of data required which
may not be proportionate to the size of the entity and the size of the
facultative reinsurance in place in relation to the overall reinsurance
program,
Don’t agree. Smaller
entities
have
less
facultative risks and
also
have
less
reinsurance treaties in
the
reinsurance
program and therefore
the
requirement
is
automatically
proportional.
60.
German Insurance
Association (GDV)
Re – J1- Costs
While the required data is generally available (directly/indirectly),
additional costs will be incurred in aligning internal systems with the
required EIOPA codes.
Without the required
EIOPA
codes
the
collected data might not
be properly processed
and therefore would not
be useful.
61.
KPMG
Re – J1- Costs
The template requires disclosing some information in relation to the
underwriting risk. Generally, reinsurance data is captured and
processed by the reinsurance or risk teams, therefore it may not be
available in the reinsurance system database (e.g. policy number,
risk identification code, etc). This may require reconciliation from the
underwriting database or re-designing the reinsurance system to
capture these data.
Without the required
EIOPA
codes
the
collected data might not
be properly processed
and therefore would not
be useful.
62.
RSA Insurance
Group plc
Re – J1- Costs
See “General” above.
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63.
UNESPA –
Association of
Spanish Insurers
Re – J1- Costs
64.
German Insurance
Association (GDV)
Re – J1Disclosure
65.
AMICE
Re – J1General
66.
ANIA Reinsurance
Working Group
Re – J1General
In the case they had to report, Spanish pure reinsurers consider this
costs médium-high.
Template is applicable
for direct business and
accepted
reinsurance.
Unfortunately
initial
operational costs cannot
be prevented. Without
the requested additional
information
collected
data might not be
properly processed and
therefore would not be
useful.
We suggest to report the list of 10 biggest facultative covers as at
31.12 of the previous year, in view of the fact that the prospective
report valuable at 01/01 would only include the multi-year facultative
risks, or covers starting on 31/12 or 01/01, with slight differences
compared with the list effective at 31/12.
1) J1 is supplementary
to J2 and therefore
must
be
a
prospective
report
too.
“Where a selected risk is made up of different policies or reinsurance
placements, the undertaking must supply details including each
policy/placement and contribute to the selection representing only
one risk.” Please clarify if details have to be reported in the Template
or in a separate “Narrative Report”.
2) In case a selected
risk is made up of
different policies or
reinsurance
placements
the
template must be
used to clarify the
details.
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67.
Association of
British Insurers
(ABI)
Re – J1General
The comments initially say that the form is prospective and give the
expected top 10 covers for the coming year.
See also comment 68.
Then it says that it has to be resubmitted at the end of the year if the
actual top 10 covers during the year turn out to be different to those
expected.
Thirdly it says that this wording means that we may have to list more
than 10 covers.
This leaves a confused picture as to whether we are submitting the
form once or twice and whether it is purely prospective.
The inclusion of retrospective data seems to be of little value but
adds to the burden of creating the form.
As this is a prospective template, we are struggling to understand
what is required in cells G11/I11/J11/L11/M11.
As most life reinsurance is direct with reinsurer, U11/V11/W11 will
usually be blank.
Cells X to AA are required risk by risk. However we would suggest
collecting it on a treaty by treaty basis.
68.
CFO Forum & CRO
Forum
Re – J1General
Clarity id required on whether the form is prospective or retropective
The comments initially say that the form is prospective and give the
expected top 10 covers for the coming year.
Then it says that it has to be resubmitted at the end of the year if the
actual top 10 covers during the year turn out to be different to those
expected.
1) First form is
prospective and
must be resubmitted
in case actual top 10
during the year will
differ. The second
form consists of the
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Thirdly it says that this wording means that we may have to list more
than 10 covers.
This leaves a confused picture as to whether we are submitting the
form once or twice and whether it is purely prospective.
The inclusion of retrospective data seems to be of little value but
adds to the burden of creating the form.
Other points of clarity required:
We do not believe that this template should apply to
Reinsurers as they do not receive this level of claims information
from their cedants..
Assuming this is a prospective template, we are struggling to
understand what is required in cells G11/I11/J11/L11/M11. These
should be removed.
As most life reinsurance is direct with reinsurer, U11/V11/W11
will usually be blank.
first form where the
new risks are added.
2) The inclusion of
retrospective data
can be of great
value in case of
major events like
the Olympic Games
which only lasts 6
weeks.
3) Other points:
a) Don’t agree.
Regarding the
top 10 risks for
reinsurers the
same
information
will/must be
available.
b) Clarified in final
LOG.
c) Agree.
Cells X to AA are required risk by risk. However we would suggest
collecting it on a treaty by treaty basis.
69.
Crédit Agricole
Re – J1-
In the template, it is outlined that an information will come from the
d) Don’t agree. In
case of a treaty,
the (facultative)
treaty will not
appear in J1 but
in J2.
See also comment 10.
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Assurances
General
code defined by the EIOPA (“result of the code provided by EIOPA”) ;
does that mean that EIOPA will determine every occurrence linked to
this code?
Will EIOPA provide a reference table : identification codes, reinsurers’
name, reinsurers’ type, country of residence, ratings, rating
agencies?
70.
Czech Insurers
Association
Re – J1General
For each LoB, a selection must be made of the 10 most important
risks in terms of reinsured exposure – should we understand
reinsurer´s exposure, our exposure or with regard of the whole deal?
Another question is if we should assess and report all contracts
occurred during the reporting period or only those which are valid at
the reported date.
1) Reinsurer’s
exposure means the
sum insured that
the
insurer
has
reinsured
on
a
facultative basis.
2) See
comment
LOG.
71.
Danish Insurance
Association
Re – J1General
We find it excessive to report such detailed information on an
undertaking’s reinsurance contracts. With this template EIOPA will be
very close to actually managing part of the underwriting business.
Reporting E7A on a net retention basis seems excessive when an
undertaking’s reinsurance programme is to be reported with a high
level of detail within the J1, J2 and J3-templates. Furthermore an
undertaking’s reinsurance profile is described in the RSR.
The description in the RSR should provide a sufficient overview of the
reinsurance programme, since the supervisors will have access to
every transaction during inspections.
The level of detail demanded in the J-templates will lead to a huge
workload resulting in several hundred pages for major undertakings.
general
of
the
1) Reinsurance is the
most
important
instrument
to
mitigate
the
underwriting
risks
and therefore must
be
monitored
intensively.
2) The RSR doesn’t
consist of sufficient
quantitative
information on a
prospective basis to
evaluate the quality
of risk mitigation.
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It is not clear to us that the supervisors need such a load of
information to properly provide effective supervision of undertakings.
3) Without
the
requested additional
information
collected data might
not
be
properly
processed
and
therefore would not
be useful.
72.
Deloitte Touche
Tohmatsu
Re – J1General
High level of detail required will be burdensome to smaller entities
and those that may have a small number of facultative agreements
in place as part of their overall reinsurance.
Don’t agree. Smaller
entities
have
less
facultative risks and
less reinsurance treaties
in
the
reinsurance
program.
73.
Federation of
Finnish Financial
Services
Re – J1General
We query the supervisory purpose of requesting only LOBs with
facultative risks, if the purpose is to evaluate the vulnerability of a
single risk event, we propose to report the 10 largest single risks
covered with facultative reinsurance.
1) Template TP Nonlife E6 is covering
the largest single
risks selected on a
net
basis
representing
the
retention
of
the
undertaking. Re-J1
is focussing on the
exposure which is
transferred
to
reinsurers
on
a
facultative basis.
Definition of FAC: Are Reverse Flow and Co-reinsurance programs
with Limit/SI/EML for single client exceeding Treaty limit or totally
outside treaty, to be regarded as facultative reinsurance and be
included in this section?
The term Facultative generally means reinsurance for one single risk
as opposed to treaty which is reinsurance of portfolio. Facultative
reinsurance is also commonly used as a mechanism in industrial
insurance in various risk sharing solutions. These situations are
because the client wishes to share the risk, and not because the “risk
2) Only risks which are
reinsured
individually
on
a
facultative
basis
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doesn’t fit into the regular policy acceptance of the insurance
company “. Clarification needed if also captive and coinsurance risks
are intended.
must be taken into
account. Facultative
obligatory
treaties
must be filled in ReJ2.
3) Comment is noted.
Captives
and
coinsurance are also
intended for both
undertakings
underwrite the risks
and are acting as a
risk carrier.
74.
German Insurance
Association (GDV)
Re – J1General
The net share could be the same for a number of the top ranked
facultative covers which raises the question, how to treat the policies
if, for example, there are more than 10 and also, how would they be
ranked/chosen. Overall we believe that this template would lead to
burdensome calculations and data re-elaborations. A more simplified
approach would be beneficial.
A significant amount of work would be required to identify the ten
policies with biggest net share of risk capital across each LOB and, as
some LOBs may be relatively small, it may not be proportionate to
require ‘top 10’ by LOB. Reporting of the 10 biggest risks across all
LOBS was suggested as an alternative or to specify a materiality
threshold at business level.
We query the supervisory purpose of requesting only LOBs with
facultative risks, if the purpose is to evaluate the vulnerability of a
single risk event, we propose to report the 10 (or 20) largest single
1) Re-J1 is not based
on a net share. The
risks are selected on
reinsured exposure
meaning the sum
insured
that
the
insurer
has
reinsured
on
a
facultative basis. For
most undertakings
acceptance
of
facultative
risks
have
a
material
impact at the net
SCR
for
underwriting
risks
and therefore the
facultative
(peak)
risks per LOB must
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risks, gross of reinsurance, and investigate whether or not the risk is
partially covered with facultative reinsurance. Probable Maximum
Loss could be used as an assessment indicator, only facultatives for
specific LOB will always be on the list (where PML is required and/or
with the highest self-retentions).
It is said (General Comment) that this template “is prospective for
the selected facultative covers that start in the coming year (active
on 1/1 or after) and are known when filling the template. Re-J1 will
be resubmitted at the end of the year (31/12)”.
At present, similar information is reported to some supervisors in
March of any given year (based on 31/12 year end), in respect of the
top 10 facultative placements in force during the year before for each
line of business.
In this way the picture is always complete and there is no need to
refresh it at a later stage. Given the fact that the facultative book is
relatively stable over the time and also considering the purposes of
the report, we recommend that this template should be submitted by
31 March (or any other date after) of any given year showing
information about the facultative placements in force during the year
before. The picture would be complete, accurate and up-to-date without need to have it re-taken at the end of the year.
There is a common business practice to use “Fronting” to handle an
international non-life risk, when you need a “Good Local Policy” and
there are national pools or similar that prevents you from issue a
local policy through FPS (Freedom to provide Service). The Insurance
be
reported.
Proposed approach
has been partially
implemented in TP
Non-life E6 which is
focussing on the net
share.
2) See also comment
1).
3) See also comment
1).
4) When
filling
this
template in the first
quarter
of
the
coming year most of
information
is
complete. However,
after
the
first
quarter it is still
possible
that
undertakings
underwrite
large
risks
which
are
active for a short
period like events.
5) Fronting
arrangements
can
not be separated
because
the
undertaking
still
underwrites the risk
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Company requests a partner in the country where you need a cover
to issue a local policy. The local policy is then ceded back to the
Requesting insurance company, being part of the total cover for a
client. Formally this is reinsurance, but it is considered more as an
administrative procedure rather than a way of risk mitigation.
However, when you fill in the RE-J1, these fronting businesses are
likely to be the most important facultative risks in many cases and
the code for Reinsurer will have to cover all the insurers as well in
this case. It would therefore be desirable if fronting business would
be separated from the reporting of facultative reinsurance as risk
mitigation.
The term Facultative generally means reinsurance for one single risk
as opposed to treaty which is reinsurance of portfolio. Facultative
reinsurance is also commonly used as a mechanism in industrial
insurance in various risk sharing solutions. These situations are
because the client wishes to share the risk, and not because the “risk
doesn’t fit into the regular policy acceptance of the insurance
company “. Clarification needed if also captive and coinsurance risks
are intended.
This template appears more applicable to ‘industrial insurance’ where
there is a high level of facultative risks. For the risk management of
other insurers, we believe it is more important to concentrate on
risks which are not covered by a reinsurance firm.
Systems and reporting tools would need to be developed to enable
lean and high quality reporting of this template. The information
requested in this template is often not held directly by undertakings.
and acts as a risk
carrier. Besides this,
most of the fronting
risks have reinsured
a large exposure on
a facultative basis.
6) Comment is noted.
Captives
and
coinsurance are also
intended for both
undertakings
underwrite the risks
and are acting as a
risk carrier.
7) See template
Non-life E6.
8) Facultative risks are
exceptional risks
which must be
administered very
well. A correct
management of risk
depends on this
information.
9) If a risk is reinsured
on
a
facultative
basis
by
five
reinsurers, for each
reinsurer a record
must be filled for
their share. In case
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It is not clear in the revised templates how to report reinsurance
shared between reinsurers. Further guidance is required on whether
separate lines should now be included for each reinsurer making up a
single reinsurance item.
Further clarification required:
Risk capital (Life) is defined as insured capital less provision
for insurance liabilities; it is not clear whether the insurance liabilities
are based on Best Estimates or Best Estimates + Risk Margin or
some other definition. Clarification would be helpful.
It is not clear how to treat reinsurance contracts not covering
the full entity.
We interpret the guidelines in the way that groups also have
to report only the 10 biggest facultative covers (and not the 10
biggest per subsidiary). Clarification would be helpful.
A definition of ‘facultative business’ would be useful to better
determine
what is expected.
It needs to be made clear whether claims and reinsurance
figures for all
templates are on either i) a booked basis within the systems or ii) a
best
estimate or iii) best estimate plus risk margin.
Definition of FAC: Are Reverse Flow and Co-reinsurance
programs with Limit/SI/EML for single client exceeding Treaty limit or
the facultative part
of the reinsurance is
not reinsured for
100% an additional
record for must be
filled showing the
share kept by the
undertaking
as
retention.
10) Further clarification:
a) Risk capital is
insured
capital
less amount for
technical
provisions based
on
best
estimates.
b) See
also
comment 9).
c) Template is not
applicable
to
groups.
d) EIOPA improved
the definition.
e) Noted.
f)
Only risks which
are
reinsured
individually on a
facultative basis
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totally outside treaty, to be regarded as facultative reinsurance and
be included in this section?
75.
77.
KPMG
RSA Insurance
Group plc
must be taken
into
account.
Facultative
obligatory
treaties must be
filled in Re-J2.
Re – J1General
We support the idea of filling in the template on a prospective basis,
consistently witht the requirements under RE-J2. However, some
uncertainties remain in relation to the wording in certain cells on this
regard, for example, whether the ceded reinsurance premium or
reinsurance commision should be the estimated amounts for the next
reporting period (explicitly stated in RE-J2). There is a general view
from the industry that the requested information is only partially
avaliable for reinsurers.
Agree.
Re – J1General
Undertakings are now asked to provide details of covers in the
coming year that “are known when filling the template”. Given the
necessary time delay between completing the form and having it
reviewed by management prior to release, there needs to be a cutoff point allowed between eligibility for inclusion and the date of
release/submission deadline. It is otherwise impossible to keep
updating the form right up to the last minute.
1) The cut-off point is
up
to
the
undertaking. Re-J1
must be resubmitted
at the end of the
year, see LOG, to
complete
the
template.
Further, the new requirement to include post-year end covers and
resubmit the form at the end of the year means that work is
effectively doubled, for no apparent benefit. We believe this form
should revert to the original proposal to report covers in place during
the period only. Having said that, given the RSR (Level 2 text, Article
296 SRS3 (2)(e)) requests details of mitigation techniques entered
into during the reporting period, and given form Re-J2 requests
See comment 41.
2) J1 focus on the
individual facultative
placement and will
be supplementary to
J2 which requires
information on a
treaty basis.
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details of all reinsurance covers in force after the year end, we do not
understand why form Re-J1 is needed at all. The information
requested is completely duplicative and provides no additional benefit
either to undertakings or to supervisors.
Agree.
In a few places in the LOG, reference is made to “treaty”. By
definition, facultative covers are not treaty covers, so necessary
amendments are needed to avoid such confusion.
78.
The Directorate
General Statistics
(DG-S) of the E
Re – J1General
Analysis of reinsurance is essential for financial stability and
macroprudential analysis (e.g. systemic risk)
Noted.
79.
The Phoenix Group
Re – J1General
At what level is the template required to be reported? Is a risk
considered to be an individual person or an individual risk? Is the
template asking for the top 10 policies or the top 10 risks? The
majority of Information requested is not currently produced at either
level and would be time-consuming and expensive to produce.
1) The principle is to
reflect the individual
underwriting
risk
which means for
property at the level
of
an
individual
building. This in line
with
the
determination of the
Net
SCR
for
catastrophe risks.
A significant amount of work would be required to identify the ten
policies with biggest net share of risk capital across each LOB and, as
some LOBs may be relatively small, it may not be proportionate to
require ‘top 10’ by LOB. Reporting of the 10 biggest risks across all
LOBS was suggested as an alternative or to specify a materiality
threshold at business level.
Systems and reporting tools would need to be developed to enable
lean and high quality reporting of this template. The information
requested in this template is often not held directly by undertakings.
2) Facultative risks are
exceptional risks
which must be
administered very
well. A correct
management of risk
depends on this
information.
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It is not clear in the revised templates how to report reinsurance
shared between reinsurers. Further guidance is required on whether
separate lines should now be included for each reinsurer making up a
single reinsurance item.
Risk capital (Life) is defined as insured capital less provision for
insurance liabilities; it is not clear whether the insurance liabilities
are based on Best Estimates or Best Estimates + Risk Margin or
some other definition. Clarification would be helpful.
A definition of ‘facultative business’ would be useful to better
determine
what is expected.
It needs to be made clear whether claims and reinsurance figures for
all
templates are on either i) a booked basis within the systems or ii) a
best
estimate or iii) best estimate plus risk margin.
An example of how an entity determines what data goes where would
be helpful.
Formulas in P11, Q11, R11, S11 T11 & V11 should refer to O11 not
O1
3) Unfortunately initial
operational
costs
can
not
be
prevented. Without
the
requested
additional
information
collected data might
not
be
properly
processed
and
therefore would not
be useful.
4) Facultative basis by
five reinsurers, for
each
reinsurer
a
record must be filled
for their share. In
case the facultative
part
of
the
reinsurance is not
reinsured for 100%
an additional record
for must be filled
showing the share
kept
by
the
undertaking
as
retention.
5) Risk
capital
is
insured capital less
amount for technical
provisions based on
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best estimates.
6) EIOPA improved the
definition.
7) Noted.
8) Comment
is
clear
without
example.
not
an
9) Agree.
80.
UNESPA –
Association of
Spanish Insurers
Re – J1General
In the case of a reinsurers making facultative business, should it
report here? More clarification is needed.
Template is applicable
for direct business and
accepted
reinsurance.
LOG clarified.
81.
Deloitte Touche
Tohmatsu
Re – J1Materiality
Wording per the LOG is not very clear, is it saying that only the top
10 FAC treaties (based on risk/exposure) should be disclosed? Or in
terms of the overall top 10 reisnurance risks, disclose the FAC
treaties if they fall within this categority. For life business is it the 10
most significant lives that are reinsured?
1) For each LOB, a
selection must be
made of the 10
most
important
individual
underwriting risks in
terms of reinsured
exposure
as
expressed in the
column “Amount of
exposure ceded to
facultative
reinsurer”.
Reinsurance treaties
like
FacultativeObligatory must be
filled in J2.
Consider wording to read “By selecting the 10 most significant
facultative agreements in terms of reinsured exposure……….. in case
of a signle risk event”
Consider introducing proportionality, a company may only have a
small number of contracts in relation to their overall book. Significnat
amount of data required if this is an insignificant portion of the
overall reinsurance program.
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2) Noted.
3) Smaller
undertakings
will
have less facultative
risks.
Therefore
proportionality
is
included in a natural
way.
82.
German Insurance
Association (GDV)
Re – J1Materiality
Most facultative purchases are concentrated within a few lines of
business, this means there will be a number of LOBS which will only
have one or two risks. Unless a materiality threshold is applied, the
template would require reporting of very small risks in respect of
those lines of business for which few facultative covers are obtained.
Reporting of such items would not serve to improve the quality of
supervision and risk management.
If the calculation is carried out without reinsurance under pillar one
due to materiality reasons (cost and resource question), can there be
an exemption from the reporting requirement of reinsurance? Within
the review report of the annual reporting the BaFin already receives
an annual summary of reinsurance contracts
83.
KPMG
Re – J1-
The template requires the selection of the 10 most important risks in
1) For
most
undertakings
acceptance
of
facultative
risks
have
a
material
impact at the net
SCR
for
underwriting
risks
and therefore the
facultative
(peak)
risks per LOB must
be reported.
2) The
use
of
reinsurance as a
mitigating
instrument
for
underwriting risks is
too important to
make an exemption
from the reporting
requirements.
More
guidance
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is
Materiality
terms of reinsured exposure for each relevant line of business.
Although the new guidance is clearer in terms of reinsured exposure,
we would expect EIOPA to provide further guidance on how to make
the selection and how to report the template if the actual top 10
covers started and /or terminated during the year have differed from
what was expected in initial J1.
provided in the LOG.
84.
RSA Insurance
Group plc
Re – J1Materiality
Most of our facultative purchases are concentrated within a few lines
of business, meaning there will be a number of lines of business
which will only have one or two risks. Unless some materiality is
applied, this would require reporting of very small risks in respect of
those lines of business for which few facultative covers are obtained.
We do not believe that such reporting of trivial items can serve to
improve the quality of supervision and risk management and
therefore this needs to be reconsidered: a more sensible alternative
would be to use a rule along the lines of that proposed for E7A – top
twenty across the board and at least 2 from each LoB.
The use of reinsurance
as
a
mitigating
instrument,
including
the credit risks, will be
evaluated per LOB and
will also serve market
analyses
at
an
aggregated
level.
Therefore
the
information is needed
per LOB. Template E7A
will
be
used
for
evaluating the retained
exposure at a solo level.
85.
ANIA Reinsurance
Working Group
Re – J1Purpose
We suggest to unify the Reports (Life and Non Life) into only one
Template, because the main items are quite similar for both business
and those few cells with a different meaning (ex. for Life business)
can easily be reported into the Template and be valid only for that
specific kind of business.
The
most
important
reason for the split
between Life and Nonlife is to provide a
template which doesn’t
consist of information
which is not needed
from the Life or the
Non-life (re)insurer.
86.
German Insurance
Association (GDV)
Re – J1Purpose
We question to what extent the template will address its stated
purpose i.e. providing insight into the risk profile of the undertaking
1) Agree
that
the
purpose needs to be
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on basis that risk is managed and mitigated in a more holistic way,
looking at extracts of data in isolation may not adequately reflect
this.
The adequacy of overall capital needs could be better addressed
through an undertaking’s ORSA and other Pillar II processes.
adapted for it should
state
that
this
template
is
supplementary to J2
and gives an insight
in the mitigating
effect
of
the
reinsurance program
and more specific an
insight
in
the
reinsured exposure
of
the
most
important facultative
risks
and
the
resulting credit risk.
2) The quote about the
capital need relates
to the template TP
Non-life E7A and
was removed.
87.
RSA Insurance
Group plc
Re – J1Purpose
See “General” above.
88.
The Phoenix Group
Re – J1Purpose
We question to what extent the template will address its stated
purpose i.e. providing insight into the risk profile of the undertaking
on basis that risk is managed and mitigated in a more holistic way,
looking at extracts of data in isolation may not adequately reflect
this. The adequacy of reinsurance could be better addressed through
an undertaking’s ORSA and other Pillar II processes.
1) Agree
that
the
purpose needs to be
adapted for it should
state
that
this
template
is
supplementary to J2
and gives an insight
in the mitigating
effect
of
the
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reinsurance program
and more specific an
insight
in
the
reinsured exposure
of
the
most
important facultative
risks
and
the
resulting credit risk.
89.
RSA Insurance
Group plc
Re – J2- cell A1
As this form is no longer applicable to groups, this cell should be
deleted.
90.
Federation of
Finnish Financial
Services
Re – J2- cell
AA1
What is the distinction between reinsurance commission and
overriding commission?
91.
German Insurance
Association (GDV)
Re – J2- cell
AA1
We do not understand why this information is being requested.
93.
Federation of
Finnish Financial
Services
Re – J2- cell
AB1
What is the distinction between reinsurance commission and
overriding commission?
94.
German Insurance
Association (GDV)
Re – J2- cell
AB1
Please refer to RE – J2 – cell AA1.
What is the distinction between reinsurance commission and
overriding commission?
2) The quote about the
capital need relates
to the template TP
Non-life E7A and will
be removed.
Template is not
applicable for groups,
column was removed
See also comment 299
See also comment 299
/ 300
See also comment 299
See also comment 299
/ 300
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96.
German Insurance
Association (GDV)
Re – J2- cell
AC1
Please refer to RE – J2 – cell AA1.
See also comment 299
/ 300
98.
German Insurance
Association (GDV)
Re – J2- cell
AD1
Please refer to RE – J2 – cell AA1.
See also comment 300;
also please note that
terms used are of
normal paramount use
in
the
reinsurance
activity and community;
nonetheless the log is
improved with a set of
more
diffused
definitions
and
instructions
wherever
necessary; to give a
non
exhaustive
explanation,
when
displaying
the
conditions of an XL
treaty
where
the
reinsurance premium is
determined according to
a
sliding
scale
(minimum – maximum)
the minimum rate has
to be reported under
field “XL rate 1” and the
maximum rate under
field “XL rate 2”; in case
How to interpret “XL rate 1 and 2” ?
It is unclear, what is required here. Are only specific reinsurance
rates covered here? A closer specification by means of an example
would be helpful.
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of a fixed rate only field
“XL rate 1” will be used.
100.
German Insurance
Association (GDV)
Re – J2- cell
AE1
Please refer to RE – J2 – cell AA1.
See also comment 98
How to interpret “XL rate 1 and 2” ?
It is unclear, what is required here. Are only specific reinsurance
rates covered here? A closer specification by means of an example
would be helpful.
102.
German Insurance
Association (GDV)
Re – J2- cell
AF1
Please refer to RE – J2 – cell AA1.
See also comment 97
104.
Deloitte Touche
Tohmatsu
Re – J2- cell
AG1
If codes are to be provided by EIOPA, it will need to be clarified how
EIOPA will develop this database, one option is to request companies
to send in details of the counterpary in advance for EIOPA to develop
the codes. If this is the option chosen then a timeline will need to be
put in place to allow companies gather the relevant data and an
indication of when the codes will be made available frion EIOPA.
See also comment 318
/ 319 /321 (J3)
106.
Lloyd’s
Re – J2- cell
AG1
This comment also applies to AM1
See also comment 318
/ 319 / 321 (J3)
Insurance undertakings are in the process of making changes to their
systems to ensure they will be able to meet Solvency II reporting
requirements. To assist in this process, EIOPA should provide an
indication as to when they expect to issue these codes.
107.
RSA Insurance
Re – J2- cell
Details on such codes need to be produced as soon as possible (how
See also comment 318
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Group plc
AG1
these will be made available and by when), to help undertakings
develop their processes.
/ 319 / 321 (J3)
108.
Deloitte Touche
Tohmatsu
Re – J2- cell
AM1
If codes are to be provided by EIOPA, it will need to be clarified how
EIOPA will develop this database, one option is to request companies
to send in details of the counterpary in advance for EIOPA to develop
the codes. If this is the option chosen then a timeline will need to be
put in place to allow companies gather the relevant data and an
indication of when the codes will be made available frion EIOPA.
See also comment 318
/ 319 /321 (J3)
109.
RSA Insurance
Group plc
Re – J2- cell
AM1
We do not understand why this is being requested when the
reinsurer’s details are requested elsewhere on the form. If the
purpose is the same as that in Re-J1, i.e. to assess “possible
counterparty risk”, there would appear to be duplication of a) the
SFCR/RSR disclosures on such risks and b) (for groups) the RC
template. If such risks are material, they will be reported in those
places; otherwise, they are not worth reporting at all. In either case,
this cell does not enhance the supervisory process.
See also comment 318
/ 319/ 321 (J3); also
please note that this
information
is
not
duplicated and must be
read in conjunction with
Cell AO1 (activity Code
Broker).
See AG1 above also.
110.
Association of
British Insurers
(ABI)
Re – J2- cell
AO1
It is essential to understand whether this is going to be a closed list
selected by EIOPA or not. Please clarify this.
This will be a closed list.
111.
CFO Forum & CRO
Forum
Re – J2- cell
AO1
It is essential to understand whether this is going to be a closed list
selected by EIOPA or not. Please clarify this.
This will be a closed list.
112.
German Insurance
Association (GDV)
Re – J2- cell
AP1
Please refer to Re - J2 – General – only estimates will be available for
contracts relating to the next reporting year.
See also comment 305
113.
RSA Insurance
Group plc
Re – J2- cell
AP1
The LOG refers to “absolute percentage” –this needs to be clarified,
especially in the case where (say) the share is 0.25% (i.e. not a
See description given in
LOG
file;
other
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114.
German Insurance
Association (GDV)
Re – J2- cell
AQ1
whole percentage).
examples were included
in the LOG/instructions;
The “estimated reinsurance premium” will be difficult to value in
particular for XL and stop loss treaties.
See also comment 306
Further clarification required:
Should the estimated premium include the estimated impact
of new business in the year after the valuation?
Should there be some comparison with reinsurance premiums
paid / payable in the current financial year?
116.
RSA Insurance
Group plc
Re – J2- cell
AQ1
We do not understand why this is needed, given P1 and Q1. There is
a lot of duplication.
There is actually no
duplication; information
under P1 and Q1 are of
a
totally
different
nature;
nonetheless
information under AQ1
might be calculated, but
it
will
depend
on
solutions that will be
proposed by IT: result
of calculation should
derive
by
applying
reinsurer’s share to Q1;
117.
The Phoenix Group
Re – J2- cell
AQ1
What is the difference between Q1 and AQ1?
See LOG.
118.
AMICE
Re – J2- cell B1
We welcome EIOPA´s agreement to introduce entity´s codes to avoid
Agree. EIOPA included
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incorrect legal names of involved entities. It would be helpful if
EIOPA provides some examples.
an example in the LOG.
119.
Czech Insurers
Association
Re – J2- cell B1
B1,C1,D1 - It is unclear whether these codes will be determined by
the undertaking or EIOPA; clarification would be helpful on this
matter.
See also comment 307
121.
XL Group plc
Re – J2- cell B1
Please confirm whether EIOPA will rely on the company’s own
definition of RI program.
National Authorities will
rely (whilst monitoring),
on indications of the
companies as to what
they consider being a
reinsurance program.
122.
German Insurance
Association (GDV)
Re – J2- cell C1
EIOPA should provide an indication as to when the codes will be
ready, undertakings will have to make the necessary amendments to
their systems.
See also comment 120.
123.
IDEAL
Lebensversicherung
a.G.
Re – J2- cell C1
Actually not existing
See also comment 120
124.
XL Group plc
Re – J2- cell C1
RI treaty - not all treaties will have a unique code, one treaty may
have two codes in company’s books to ensure appropriate
identification of specific terms per reinsurer.
The situation described
is an internal solution;
representation
of
treaties
must
be
effected
by
safeguarding
their
uniqueness; instructions
will
consider
these
aspects;
125.
German Insurance
Association (GDV)
Re – J2- cell D1
It is unclear whether a list of these will be provided by EIOPA or
determined by the undertaking?
See also comment 308
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126.
IDEAL
Lebensversicherung
a.G.
Re – J2- cell D1
more precise definition needed what is meant
See also comment 308
127.
KPMG
Re – J2- cell D1
The template requires disclosing a progressive section number for
each different line of business covered under the same treaty, for
those sections covering different type of reinsurance and for sections
covering different layers of the same program. We would expect
EIOPA to provide further guidance on how to assign this section
number and how all this information will be presented and captured
in the template.
These
aspects
are
covered in the final LOG
instructions.
128.
RSA Insurance
Group plc
Re – J2- cell D1
Although there are numerous references to “treaty” (see “General”
above), the LOG example refers to facultative cover. Clarification of
scope is required.
Reference to facultative
placements made for
uniformity
purposes
only;
129.
Federation of
Finnish Financial
Services
Re – J2- cell E1
Progressive number of surplus/layer in program only works for
simple structures, as only the excess point and limit in combination
with program share will define the position of an agreement in a
reinsurance program. Common rules need to be specified to assign
numbering of surplus/layer in program.
Noted;
132.
German Insurance
Association (GDV)
Re – J2- cell G1
If an insurance company operates non-traditional or finite
reinsurance, this information should be entered on a separate sheet
(or for example, in the sheet Re SPV). For all other insurance, this
column can be omitted
No, this is not the
spirit; identification of
non traditional /finite
reinsurance
is
performed through cell
G1;
133.
Federation of
Finnish Financial
Services
Re – J2- cell H1
How should treaties that include several LoB’s be reported. E.g.
Event covers usually cover both FOP, MAT, MOC etc.
See also comment 309
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134.
German Insurance
Association (GDV)
Re – J2- cell H1
Many of an undertaking’s reinsurance contracts will cover multiple
LOBs therefore an additional split per LOB will be very onerous.
See also comment 309
How should treaties that include several LoB’s be reported. E.g.
Event covers usually cover both FOP, MAT, MOC etc.
Line of business: Are SII LoBs meant here? (We have doubts since
the LOG file talks about “Fire and other damage”.)
135.
German Insurance
Association (GDV)
Re – J2- cell I1
The definition of this item is not clear. It has been assumed this is a
subcategory of a LOB. However the example in the LOG “Property”
implies otherwise.
LoB as to be defined in
the final level 2 text.
See also comment 310
What does “Line of Activity” mean? How to differentiate between LoB
and HRG according to Solvency II?
137.
RSA Insurance
Group plc
Re – J2- cell I1
The purpose of this is not understood at all – analysis by SII LoB is
sufficient.
See also comment 310
138.
AMICE
Re – J2- cell J1
Type of reinsurance treaty
Meaning of term
“concatenated” is not
clear. This is not a term
usually in use in the
reinsurance
terminology; however if
reference is made to
the inuring effect of
reinsurance this may be
The LOG document does not cover all types of existing reinsurance
contracts. Concatenated reinsurance treaties are not covered either.
More guidance should be included in the LOG document.
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stated by means of cell
B1 (Reinsurance
program code); specific
guidance is included.
139.
CFO Forum & CRO
Forum
Re – J2- cell J1
Type of reinsurance treaty: closed list not consistent with list in QRT
IGT3 (cell J6)
Consistency check with
IGT3-J6 will be done.
This list encompasses
the real terminology
actually in use in the
reinsurance market;
objective of this
reporting is to enable
supervisors to
appreciate the potential
impact on companies
BS of the purchased
reinsurance according
to various types.
140.
German Insurance
Association (GDV)
Re – J2- cell J1
“Working XL” and “Catastrophe XL” are not specific terms. Stop Loss
as a term is also used differently and is not specific. Definitions are
needed to cover these types of treaties.
See also comment 311
Type of reinsurance treaty value list as defined here is different from
the types defined on IGT3-J6. There should be one value list. The
value list does not seem to be covering all possible types (missing:
Financial reinsurance) and we would expect some specific types for
Life reinsurance.
What to enter if the reinsurance contract is treated as a surplus
treaty contract (Summenexcedentenvertrag) below a certain limit set
Consistency check with
IGT3-J6 will be done.
This list encompasses
the real terminology
actually in use in the
reinsurance
market;
objective
of
this
reporting is to enable
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for regulatory purposes, and is treated optionally above that limit. A
more closer specification would be helpful.
supervisors
to
appreciate the potential
impact on companies
BS of the purchased
reinsurance
according
to various types.
We will be glad to
examine an example, to
provide an exhaustive
answer; with the limited
description
provided
now we would think to a
Fac. Oblig. Treaty;
142.
ING Group Data
modelling team
Re – J2- cell J1
Type of reinsurance treaty value list as defined here is different from
the types defined on IGT3-J6. Should be one value list.
Value list does not seem to be covering all possible types: missing
Financial reinsurance and would expect some specific types for Life
reinsurance.
See also comment 311
143.
XL Group plc
Re – J2- cell J1
Clarification is needed on one of the types of reinsurance treaty
definition used in cell J1 - 45: reinstatement cover . For example 42:
excess of loss (per risk) and 43: excess of loss (per event) may also
include reinstatement cover.
Please note that terms
used are of normal
paramount use in the
reinsurance activity and
community;
nonetheless the log is
improved with a set of
more
diffused
definitions
and
instructions
wherever
necessary;
144.
AMICE
Re – J2- cell K1
Coding
has
been
structured to take into
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Inclusion of catastrophic guarantees
It would be helpful if EIOPA could clarify the code for Windstorm.
Should it be coded as « C » (hurricane, windstorm…) or « D »
(freeze, hail, strong wind etc..).
For example, in the French market, gale (coup de vent) is coded as
« D ».
consideration all the
prevailing aspects which
can
be
found
throughout Europe and
the rest of the world.
Any
consistent
and
detailed
proposal/suggestion
would be welcome, if it
covers all the aspects
involved.
145.
German Insurance
Association (GDV)
Re – J2- cell K1
We question the need to report this item due to the large costs
involved.
See also comment 312
148.
KPMG
Re – J2- cell N1
The template requires disclosing the type of underwriting model.
There is no explicit guidance in relation to the closed list of different
models provided by EIOPA.
See also comment147
149.
AMICE
Re – J2- cell O1
Type of underwriting model (SI, MPL, PML, EML)
These terms are of
normal paramount use
in the reinsurance
activity and community;
The log is improved
with a set of more
diffused definitions
wherever necessary;
kindly note that the
stress is put on
becoming aware of
whether the treaty
exposure is geared to
It would be helpful if more guidance is provided on the information to
be reported in this cell and in particular on the following concepts
MPL = Maximum Possible Loss
PML = Probable Maximum Loss
EML = Estimated Maximum Loss
OTH = Other
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sum insured or else.
You may find tens if not
more definitions, and
the reinsurance function
is normally very well
aware of the type of
protection granted by
the treaty.
The three definitions
provided are those in
main use; use of
“OTH”, would allow the
supervisor to decide on
possible additional
considerations;
150.
Federation of
Finnish Financial
Services
Re – J2- cell O1
See comment to Re - J1 cell N1.
See Re - J1; 42.
151.
German Insurance
Association (GDV)
Re – J2- cell O1
There does not appear to be a LOG entry for this cell.
See LOG item “Type of
underwriting
model”.
Cell number in LOG will
be adapted.
RSA Insurance
Group plc
Re – J2- cell O1
152.
Please refer to Re - J1 cell N1.
The LOG states that the purpose of this cell is to assess the net
retention – but given that the form does not actually ask for the net
retention and considering E7A already requests such information by
LoB, we believe this is not needed at all.
Further, in the case of treaties with multiple risks, this cell is
meaningless.
Net retention must be
considered
and
assessed in relation to
the credit risk; this
information
enables
supervisors
to
give
proper consideration to
level
of
ceded
exposures;
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153.
AMICE
Re – J2- cell P1
Estimated Subject Premium Income (XL – ESPI)
It is defined by EIOPA as the amount of premium referring to the
portfolio protected under Excess of Loss treaties. However, it may
not correspond to the underlying risks ( i.e. fire treaty where the
basis premium is equal to the total amount of premiums of that
product).
The ESPI is normally
the basis of calculation
of the excess of loss
reinsurance
premium
payable to reinsurers; it
is
therefore
clearly
stated in the treaty
documentation; it is
necessary
also
for
evaluation of similar
reinsurances in some
case even purchased by
the same company;
154.
German Insurance
Association (GDV)
Re – J2- cell P1
We do not understand why this information is being requested?
See also comment 153
155.
RSA Insurance
Group plc
Re – J2- cell P1
We do not understand why this is needed, given Q1 and AQ1.
See also comment 153
156.
German Insurance
Association (GDV)
Re – J2- cell Q1
The LOG states that the premiums paid for 100% of the treaty should
be stated – it is not clear how this would work where a treaty has
only been partially placed.
See also comment 314
What is meant here? Gross in terms of the total portfolio or gross in
terms of the proportion that is reinsured? Corresponding estimation
are only partly possible.
157.
Groupe Consultatif
Re – J2- cell Q1
This is described as “the amount of premium paid for 100% of the
treaty” and “the equivalent of the reinsurance premium for 100%.”
Clarification needed on the meaning here and the interaction with cell
See also comment 115
and 116
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number AQ1.
158.
RSA Insurance
Group plc
Re – J2- cell Q1
We do not understand why this is needed, given P1 and AQ1.
See also comment 115
and 116
159.
The Phoenix Group
Re – J2- cell Q1
‘Gross estimated treaty premium income’ – Is this the premium paid
to the reinsurer?
See also comment 314
160.
German Insurance
Association (GDV)
Re – J2- cell R1
N1.2 (%) – further guidance and definition is requested?
See also comment 315
161.
AMICE
Re – J2- cell T1
162.
Czech Insurers
Association
Re – J2- cell T1
T1,U1 – in case of Surplus reinsurance the amount can be set as an
interval.
Please note that terms
used are of normal
paramount use in the
reinsurance activity and
community;
nonetheless the log is
improved with a set of
more
diffused
definitions
and
instructions
wherever
necessary;
163.
German Insurance
Association (GDV)
Re – J2- cell T1
Further guidance is required as to whether sub-limits are intended for
this item?
See also comment 316
164.
German Insurance
Association (GDV)
Re – J2- cell V1
No question received
We believe that further guidelines should be developed for this
template to include examples for different reinsurance programs in
See also comment 316
and 317
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order to prevent misunderstandings. For example, how (per line of
business) a reinsurance program would be reported, which contains
quota share reinsurance, excess liability reinsurance and Life XLreinsurance.
Please find below an example for a Life Reinsurance Program:
Treaty
risk/event
Retention/Priority
Maximum/treaty
Life Q/S
70%
30%
Life Surplus 0
Limit Maximum Cover per
Share of Reinsurer
25.000
250.000
25.000
250.000
100%
Life Cat XL/event 250.000
100%
2.000.000
3.000.000
Further clarification required:
For certain types of reinsurance, the limits are applied to each
policy while for other types of reinsurance; limits may be applied to a
portfolio of policies. Should the presentation of amounts be made
consistent?
P1: Limit: there could be different limits for treaties or LOB, it
is not clear which one should be reported.
For
specific
needs
EIOPA added a field
which could be used for
free annotations;
R1: Maximum cover per treaty: the definition in the LOG
specifies how to calculate this with the number of “free”
reinstatements. What happens when some reinstatements are not
free but at pre-defined rates?
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165.
PwC
Re – J2- cell V1
166.
The Phoenix Group
Re – J2- cell V1
No question received
We believe that further guidelines should be developed for this
template to include examples for different reinsurance programs in
order to prevent misunderstandings. For example, how (per line of
business) a reinsurance program would be reported, which contains
quota share reinsurance, excess liability reinsurance and Life XLreinsurance.
The log is improved
with a set of more
diffused definitions and
instructions
wherever
necessary;
in this respect we will
appreciate
your
submitting
a
actual
example
167.
German Insurance
Association (GDV)
Re – J2- cell X1
Should the obligatory amount (Obligatorium) for the first excedent be
reported here?
Normal
limit
of
a
surplus
goes
under
V1;the log is improved
with a set of more
diffused definitions and
instructions
wherever
necessary; we will be
glad to examine an
example, to be able to
provide an exhaustive
answer;
170.
XL Group plc
Re – J2- cell Y1
Please confirm whether the maximum cover per treaty figure should
include reinstatements.
See also comment 169
171.
The Phoenix Group
Re – J2- cell Z1
Can further clarification be provided as to the definition here?
Please note that terms
used are of normal
paramount use in the
reinsurance activity and
community;
nonetheless
we
are
planning to integrate
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the log with a set of
more
diffused
definitions
and
instructions;
172.
CEA
Re – J2- Costs
Significant additional costs will be incurred as a result of this
template and the additional data required. For example: progressive
sections; progressive number and quantity of surplus/layers in
program; EIOPA codes and names of Reinsured, Reinsurer and
Broker; Type of treaty; Catastrophic guarantees specifications.
As previously mentioned, it will be required to manually input
information into this template and this will have a cost impact.
1) Without the
requested additional
information
collected data might
not be properly
processed and
therefore would not
be useful.
2) A correct
management of risk
depends on these
information;
3) See also comment
195
173.
Federation of
Finnish Financial
Services
Re – J2- Costs
There will be a lot of added costs if all needed data has to be added
to reinsurance system (e.g. progressive sections, progressive number
and quantity of surplus/layers in program, EIOPA codes and names of
Reinsured, Reinsurer and Broker, Type of treaty, Catastrophic
guarantees specifications).
See also comment 172
and 195
174.
German Insurance
Association (GDV)
Re – J2- Costs
Significant additional costs will be incurred as a result of this
template and the additional data required. For example: progressive
sections; progressive number and quantity of surplus/layers in
program; EIOPA codes and names of Reinsured, Reinsurer and
Broker; Type of treaty; Catastrophic guarantees specifications.
See also comment 172
and 195;manual input
will
depend
on
companies’
internal
organization; the bulk
of the input will take
place
for
the
first
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As previously mentioned, it will be required to manually input
information into this template. This will have a cost impact.
175.
RSA Insurance
Group plc
Re – J2- Costs
This form requires a lot of analysis. In particular, in the case of multiclass treaties, one cover would need to be split between different
lines of business, different reinsurers, different lines of activity and
by layer:
During our recent dry-run exercise, for one layer alone of an
umbrella global cat treaty, the data ran to over 200 lines.
The treaty had a number of layers – due to the time taken, we
only completed the form on a sample basis; otherwise the full treaty
would have run into thousands of lines of data.
We believe such disclosure is not compliant with the Level 1 and 2
texts’ provisions on proportionality.
It would be less burdensome for undertakings simply to send their
supervisors all their treaty cover notes and for the supervisors to
extract what they need from those. Alternatively, a diagrammatic
format could be used to provide details of our multi-column, multilayered treaties, with ad-hoc queries to be received subsequently
if/where needed.
submission,
with
gradual changes year
after year, with very
limited exceptions;
See also comment 172
and
195;
however
duplication of lines due
to various reinsurers’
participations, might be
dramatically
reduced
according to solutions
that might be proposed
by IT; please consider
that
it
is
not
supervisor’s
responsibility to assess
the risk element: when
deciding
on
the
purchase
of
reinsurance, Companies
must be well aware for
risk
management
purposes of the impact
on each LOB, also for
Balance
Sheet
purposes;
as
a
consequence
each
treaty must clearly be
build in such a way as
to
allow
correct
evaluation
of
how
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recoveries will work;
therefore
basic
conditions
must
be
clearly identified (limit,
premium, etc.) so as to
enable companies to
generate a section for
each LOB and/or type
treaty.
176.
The Phoenix Group
Re – J2- Costs
Significant additional costs will be incurred as a result of this
template and the additional data required. For example: progressive
sections; progressive number and quantity of surplus/layers in
program; EIOPA codes and names of Reinsured, Reinsurer and
Broker; Type of treaty; Catastrophic guarantees specifications.
See also comment 175
and 195;
It will be required to manually input information into this template.
This will have a cost impact.
There will be a lot of added costs if all needed data has to be added
to reinsurance system (e.g. progressive sections, progressive number
and quantity of surplus/layers in program, EIOPA codes and names of
Reinsured, Reinsurer and Broker, Type of treaty, Catastrophic
guarantees specifications).
177.
UNESPA –
Association of
Spanish Insurers
Re – J2- Costs
Reinsurers consider these costs would be medium
Noted;
178.
A.M. Best Europe Rating Services Ltd
Re – J2Disclosure
Public disclosure would be beneficial in order to assess risk transfer.
Noted;
Key information: F1, I1-N1, S1-Z1, AH1 and AP1. Most of this
information is currently available in the FSA returns.
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179.
ANIA Reinsurance
Working Group
Re – J2Frequency
We suggest a half-yearly report, since a quarterly resubmission could
be a heavy burden for the companies.
Noted.
Resubmission
will be half-yearly.
180.
CEA
Re – J2Frequency
It is envisaged by EIOPA that “in case of any changes introduced to
the reinsurance structure, i.e. modifications to treaties in force
including renewals, cancelled treaties or new treaties placed during
the previous quarter, the template needs to be resubmitted quarterly
as at the inception date of the quarter”.
This
is
the
actual
procedure adopted in
some countries (half
yearly updates); This
template
will
be
reported annually by
default and resubmitted
half-yearly in case of
any changes introduced
to
the
reinsurance
structure.
Some undertakings currently supply more or less the same treaty
book data to supervisors however templates are supplied in March of
any given year and re-submitted in October, in case of changes
occurred during the first H/Y, and in March of the following year, in
case of changes occurred during the second H/Y.
This frequency would allow for complete reporting on a default
annual basis:
Template_1
Template_2
Template_3
Year 2013
2014
31 March 2013
31 October 2013
31 March
Year 2014
2015
31 March 2014
31 October 2014
31 March
Year 2015
2016
31 march 2015
31 October 2015
31 March
Template_1 is the picture of the treaty book at 01.01
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Template_2 is the picture of the treaty book at 30.06
Template_3 is the picture of the treaty book at 31.12
181.
Crédit Agricole
Assurances
Re – J2Frequency
It is outlined that the Re-J2 template shall be required quarterly in
case of new treaties, cancelled treaties or major modifications in the
reinsurance program. Could you clarify what kind of update it will
be? Shall the full J2 template be re-submitted to the regulator, or
only treaties impacted by main changes? Shall an qualitative
explanation be added?
The
complete
resubmission
incorporating
changes
must be provided as to
enable all the parties
concerned to have a
complete
updated
situation; this will not
cause undue burden
because it will consist
only
in
a
partial
modification
and
resubmission
of
an
existing data file;
182.
Deloitte Touche
Tohmatsu
Re – J2Frequency
Will be burdensome for smaller entities to update for changes –
Guidance says material changes should be submitted quartely, how
will this be measured/decided ? Thresholds should be considered.
Any
variation
which
changes the economic
impact of a reinsurance
is material; establishing
thresholds in this area
is
not
viable;
nonetheless
we
will
provide
further
indications in the LOG/
Instructions;
183.
German Insurance
Association (GDV)
Re – J2Frequency
It is envisaged by EIOPA that “in case of any changes introduced to
the reinsurance structure, i.e. modifications to treaties in force
including renewals, cancelled treaties or new treaties placed during
Noted. This template
will
be
reported
annually by default and
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the previous quarter, the template needs to be resubmitted quarterly
as at the inception date of the quarter”.
Some undertakings currently supply more or less the same treaty
book data to supervisors howevertemplates are supplied in March of
any given year and re-submitted in October, in case of changes
occurred during the first H/Y, and in March of the following year, in
case of changes occurred during the second H/Y. This frequency
seems very reasonable both from the viewpoint of the supervisor and
that of the undertaking. It is our considered view that increasing the
frequency would only make the reporting task more cumbersome
without achieving any real benefit. We therefore recommend the
adoption of the following reporting pattern:
Template_1
Template_2
Template_3
Year 2013
2014
31 March 2013
31 October 2013
31 March
Year 2014
2015
31 March 2014
31 October 2014
31 March
Year 2015
2016
31 march 2015
31 October 2015
31 March
resubmitted half-yearly
in case of any changes
introduced
to
the
reinsurance structure.
Template_1 is the picture of the treaty book at 01.01
Template_2 is the picture of the treaty book at 30.06
Template_3 is the picture of the treaty book at 31.12
184.
KPMG
Re – J2Frequency
The template needs to be submitted on an annual basis, however, in
the case of new or cancelled treaties and in the case of material
The
resubmission
complete
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changes in the reinsurance program, J2 should be resubmitted
quarterly as an update. We understand that in order to allow
consistency with RE-J1, the template should only be re-submitted at
the end of the year. In addition, we see no benefit in re-submitting
the entire template. Rather, only those treaties with material
changes and those new reinsurance treaties written should be
reported again at the end of the year.
incorporating
changes
must be provided as to
enable all the parties
concerned to have a
complete
updated
situation; this will not
cause undue burden
because it will consist
only
in
a
partial
modification
and
resubmission
of
an
existing data file;
185.
RSA Insurance
Group plc
Re – J2Frequency
We welcome EIOPA’s change of heart regarding the need to include
anticipated covers for the forthcoming year, even if not actually
entered into.
Noted;
186.
The Phoenix Group
Re – J2Frequency
Can you please confirm whether there will be any requirement to
report this QRT quarterly in the first year of SII implementation, or
will the QRT only be required (assuming any new or cancelled
treaties and in the case of material changes in the reinsurance
program) quarterly following the first annual submission of RE – J2?
QRT will be required
since the first year; this
template
will
be
reported annually by
default and resubmitted
half-yearly in case of
any changes introduced
to
the
reinsurance
structure.
187.
AMICE
Re – J2General
This template requires information which cannot be processed in an
automated way.
When deciding on the
purchase
of
reinsurance, Companies
must be well aware for
risk
management
purposes of the impact
on each LOB, also for
The requested information in some cells
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Cell T1 - Retention or priority
(amount)
Cell X1 - Maximum cover per risk or event and
Cell Y1 - Maximum cover per treaty (cell Y1)
Is not available when a reinsurance treaty covers different lines of
business or different entities.
188.
Association of
British Insurers
(ABI)
Re – J2General
We support solo reporting only for this template. Although we do
note that some Group information is now required for Financial
Stability purposes.
A number of cells seem to be General Insurance related and not
relevant to Life (D-F, P, R, S, Z-AF, AM-AO, and AP).
We suggest that there should be a material change threshold.
189.
CEA
Re – J2General
Reinsurance solutions for the “next reporting year” are generally not
finalised until very late and thus information about the next year
neither exists nor is registered until very late in the year or early in
Balance
Sheet
purposes;
as
a
consequence
each
treaty must clearly be
build in such a way as
to
allow
correct
evaluation
of
how
recoveries will work;
therefore
basic
conditions
must
be
clearly identified (limit,
premium, etc.) so as to
enable companies to
generate a section for
each LOB and/or type
treaty.
References to the cells
are neither relevant to
J2 which was released
for public consultation,
nor
the
previous
document release for
the
2nd
informal
consultation, in early
2011; having said that
please note that J2 has
to be submitted for both
life
and
non-life
business ; see also 190;
1) Comment is not
very clear. In the
example proposed
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the next year. For example, 2015 treaties cannot be reported fully in
2014. We question if EIOPA intend that reinsurance agreed, but not
in force, be reported in this template. Or since accurate data is not
always available if estimations would be accepted.
This template requires information which cannot be processed in an
automated way, information must be manually added. As this is an
extensive template, it should contain information that is readily
available in systems. This template would lead to burdensome
calculations and data re-elaborations. A simplified template would be
highly welcomed.
We query whether risks/policies that are reinsured to captives or
fronted to other insurance companies are considered as program or
facultative placements.
The template implies that some of the terms of the treaty (such as
limit, maximum cover, etc) will apply across all reinsurers; where this
is not the case further advice/guidance is required on how the
template should be completed.
A clear distinction is required between those covers which have
already been signed and those which are only expected to be signed.
Reporting of all reinsurance transactions is extensive, especially for
larger companies (up 1.500 pages).
by CEA the year
2015 will be
reported during
2015 together with
2014 BS figures.
Therefore no
problem may be
envisaged. See also
187.
2) See also 172.
3) Reinsurance has to
be reported in the
actual form,
independently from
peculiarities in
respect of captives
and/or fronting.
4) Treaties and/or
facultative
placements with
different conditions
may be different
treaties and or
different facultative
placements;
instructions will be
provided with the
final LOG;
5) See also 305.
6) See also 172.
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Further clarification required:
Should the “Treaty” or “Program” be reported? The title
indicates that programs should be reported whereas in the individual
cells, only the treaty is mentioned. We would prefer to report
programs.
The template implies that some of the terms of the treaty
(such as limit, maximum cover, etc) will apply across all reinsurers,
where this is not the case, further advice/guidance would be required
on how to complete the template.
It remains unclear whether information per year, risk or
exposure is required. Moreover, more guidance and clear definitions
are necessary in order to adequately fill the template.
We query whether all ceded reinsurance is required in this
template irrespective of the size of the portfolio/risk ceded?
7) Clarification:
a) Reporting should
be effected
indicating all the
individual
reinsurance
treaties;
programs could
be identified
through a group
code for which
additional
column is
provided.
b) These aspects
will be regulated
when more
detailed
instructions will
be provided
through future
implementations
of the log or
manual.
c) Information has
to be provided to
reflect what is
shown in the
treaty wording.
More detailed
instructions will
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be provided
through future
implementations
of the log or
manual.
d) Without the
requested
additional
information
collected data
might not be
properly
processed and
therefore would
not be useful. A
correct
management of
risk depends on
these
information;
190.
CFO Forum & CRO
Forum
Re – J2General
This template will be particularly burdensome to complete.
1) See also 172.
2) Question not clear.
A number of cells seem to be General Insurance related and not
relevant to Life (D-F, P, R, S, Z-AF, AM-AO, AP).
We suggest that there should be a material change threshold.
3) Decision has been
taken not to base
reporting on a
material threshold
or proportionality to
allow data to be
significant and
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properly usable as a
whole.
191.
Czech Insurers
Association
Re – J2General
We query how to report retroceded contracts where our company
doesn´t act as primary insurer but as a reinsurer forwarding the risk
to the third company. Should we report these contracts and do they
differ from the contracts where our company acts as a primary
insurer ?
All reinsurance treaties
have to be reported;
192.
Danish Insurance
Association
Re – J2General
We find it excessive in relation to supervisory needs to report such
detailed information on an undertaking’s reinsurance contracts. With
this template EIOPA will be very close to actually managing part of
the underwriting business. Reporting E7A on a net retention basis
seems excessive when an undertaking’s reinsurance programme is to
be reported with a high level of detail within the J1, J2 and J3templates. Furthermore an undertaking’s reinsurance profile is
described in the RSR.
See also comment 172,
184, 187
The description in the RSR should provide a sufficient overview of the
reinsurance programme, since the supervisors will have access to
every transaction during inspections.
The level of detail demanded in the J-templates will lead to a huge
workload resulting in several hundred pages for major undertakings.
It is clear to us that the supervisors do not need such a load of
information to properly perform effective supervision.
193.
Deloitte Touche
Tohmatsu
Re – J2General
Reporting will be burdensome for smaller entities, consider simplfied
reporting for smaller entities.
The detailed of the treaties requires extraction of data from several
different sources and will also require continuous maintenance and
for the data streams to reconcile when a treaty is updated, cancelled
See also comment 195
On the contrary, it is
our opinion that this
activity should prove
easier
for
smaller
entities; also it may be
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etc. Even though a company may already maintain a treaty list, the
cost of correlating and monitoring the data may be significant. The
level of detail required will be burdensome for a small entity.
even more important
than for bigger entities,
from a stability point of
view;
See also 195
194.
Federation of
Finnish Financial
Services
Re – J2General
Referring to treaties in the LOG document – is this really what should
be reported in this template or is it all ceded reinsurance?
Shall all ceded business be included irrespective of the size of the
portfolio/risk ceded?
Outgoing
reinsurance
must be represented;
For other points, see
also comment 189;
Reinsurance treaties are not purchased so that 2014 treaties can be
reported fully in 2013. Only estimates.
20% materiality threshold is reasonable, however depending of the
size of the treaty in question, as individual treaties may be
insignificant. Rather overall 20% change.
Report contains information that is not available in reinsurance
systems and has to be manually added. As this is an extensive
report it should contain information that is readily available in
systems. Are risks/policies that are reinsured to captives or fronted
to other insurance companies considered as program or facultative
placements?
Reporting “when needed” means quartelly.
The 20% referred to in
this
question
was
mentioned in a previous
log and referred to EPI
only; this threshold is
still
applicable
for
changes in premium
ceded in excess of +
20% or -20% from the
estimate
originally
advised, in as much as
this
fluctuations
represent an important
change of the treaty;
this is reflected in the
LOGs
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195.
German Insurance
Association (GDV)
Re – J2General
Reinsurance solutions for the “next reporting year” are generally not
finalised until very late and thus information about the next year
neither exists or is registered until very late in the year or early in
the next year. For example, 2015 treaties cannot be reported fully in
2014. We question if EIOPA intend that reinsurance agreed, but not
in force, be reported in this template. Or since accurate data is not
always available if estimations would be accepted.
This template requires information which cannot be processed in an
automated way, information must be manually added. As this is an
extensive template, it should contain information that is readily
available in systems. This template would lead to burdensome
calculations and data re-elaborations. A simplified template would be
highly welcomed.
We query whether risks/policies that are reinsured to captives or
fronted to other insurance companies are considered as program or
facultative placements.
The template implies that some of the terms of the treaty (such as
limit, maximum cover, etc) will apply across all reinsurers; where this
is not the case further advice/guidance is required on how the
template should be completed.
A clear distinction is required between those covers which have
already been signed and those which are only expected to be signed.
Reporting of all reinsurance transactions is extensive, especially for
larger companies (up 1.500 pages).
See also comment 172,
189, 312, 317;
Decision has been taken
not to base reporting on
a material threshold or
proportionality, to allow
data to be significant
and properly usable as
a whole.
Templates were revised
to cope with this aspect
and to avoid undue
replication
of
information:
revision
will
consist
in
the
separation of the basic
information
of
each
treaty
/
facultative
placement - which are
unique and will be
represented only in one
line
from
the
information
of
reinsurers’
participation;
the
number
of
fields/columns
will
remain
basically
unaltered, but there will
be a reduction of data
which
is
roughly
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This Excel sheet asks for the exact terms of the reinsurance
programs. An evaluation of the reinsurance strategy solely on the
basis of these figures is questionable. A meaningful analysis of the
reinsurance program requires profound knowledge of the insured
risks and the risk appetite of management.
Further clarification required:
Should the “Treaty” or “Program” be reported? The title
indicates that programs should be reported whereas in the individual
cells, only the treaty is mentioned. We would prefer to report
programs.
The template implies that some of the terms of the treaty
(such as limit, maximum cover, etc) will apply across all reinsurers,
where this is not the case, further advice/guidance would be required
on how to complete the template.
estimated in between ¼
and
1/5
of
what
originally
designed.
Shares and basic data
will
be
connected
through key fields which
can be automatically
replicated.
We have introduced a
field
dedicated
to
annotations referred to
each
reinsurer’s
participation, in order
not to impact on the
treaty
“uniqueness”;
For other needs it will
also depend on IT
solutions:
It remains unclear whether information per year, risk or
exposure is required. Moreover, more guidance and clear definitions
are necessary in order to adequately fill the template.
We query whether all ceded reinsurance is required in this
template irrespective of the size of the portfolio/risk ceded?
How to treat premium adjustment clauses?
In general the Log-Files has to be adjusted. Clear guideline is
necessary to understand the meaning of each position.
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196.
ING Group Data
modelling team
Re – J2General
Cell AI1: how should cases be handled where one reinsurer has
more than one type (e.g. internal life reinsurer). Actually in our case
all reinsurers can be categorized in both ways internal/external and
life/non-life/composite.
See LOG description;
197.
KPMG
Re – J2General
We support the idea of filling in the template on a prospective basis,
consistently with the requirements under RE-J1. There is a general
view that requested information is only partially avaliable for
reinsurers.
Noted;
198.
Royal London
Group
Re – J2General
The LOG contains reference to cell AQ1 (estimated premium outgo in
the year) but this has been deleted from the template
Cell AQ1 has not been
deleted: it is still part of
J2;
199.
RSA Insurance
Group plc
Re – J2General
Reference is made throughout to “treaty” – we have therefore
presumed that this form concerns only to reinsurance treaties and
not facultative covers.
J2 is the template for
treaties;
No reference is made about currency; we have assumed that
reporting is to be made in the currency of the cover, not the
reporting currency of the undertaking. Clarification is needed here.
This is especially important in the case of multi-currency treaties,
where (for example) different layers are denominated in different
currencies.
Cell
N1
Currency;
J1 is the template for
facultative reinsurance;
is
about
200.
The Directorate
General Statistics
(DG-S) of the E
Re – J2General
Please refer to Re - J1- General
Your comment reflects
exactly the reason why
it has been decided not
to introduce thresholds
or proportionality;
201.
The Phoenix Group
Re – J2General
Reinsurance solutions for the “next reporting year” are generally not
finalised until very late and thus information about the next year
neither exists or is registered until very late in the year or early in
See also comment 172,
189, 312, 317;
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the next year. For example, 2015 treaties cannot be reported fully in
2014. Accurate data is not available and only estimates would be
available.
Reporting of all reinsurance transactions is extensive. The
reinsurance programme will be described in the RSR, and hence this
seems like a duplication of effort.
Decision has been taken
not to base reporting on
a material threshold or
proportionality, to allow
data to be significant
and properly usable as
a whole.
Should the “Treaty” or “Program” be reported? The title indicates that
programs should be reported whereas in the individual cells, only the
treaty is mentioned. We would prefer to report programs. Please
clarify the level or reporting.
It remains unclear whether information per year, risk or exposure is
required. Moreover, more guidance and clear definitions are
necessary in order to adequately fill the template.
Report contains information that is not available in reinsurance
systems and has to be manually added. As this is an extensive report
it should contain information that is readily available in systems. Are
risks/policies that are reinsured to captives or fronted to other
insurance companies considered as program or facultative
placements?
202.
The Phoenix Group
Re – J2- Groups
203.
CEA
Re – J2Materiality
Is this QRT applicable to Groups? Summary document indicates not.
Cell A1 indicates that it is.
Template is not
applicable for groups,
column will be removed
No question received
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204.
Deloitte Touche
Tohmatsu
Re – J2Materiality
Thresholds should be introduced to allow for smaller entities or those
with insgnificant reisnurance programs report less volumes of data.
On the contrary, it is
our opinion that this
activity should prove
easier
for
smaller
entities; also it may be
even more important
than for bigger entities,
from a stability point of
view;
See also 195
205.
German Insurance
Association (GDV)
Re – J2Materiality
206.
KPMG
Re – J2Materiality
No question received
The template does not include any materiality threshold. However,
we believe that it should only be reported essential information in the
context of treaties that could materially influence the assessment of
the financial position of the insurance undertaking. This will avoid
these requirements becoming too costly to produce and reduce
reporting burden.
Decision has been taken
not to base reporting on
a material threshold or
proportionality, to allow
data to be significant
and properly usable as
a whole.
See also 195
208.
Royal London
Group
Re – J2Materiality
The lack of a materiality limit is onerous. There are a few
reinsurance arrangements in place which are relatively small
compared to the total of our reinsurance arrangements. We will have
to disclose all of these under the current rules.
Reinsurance
treaties
may be “small” in terms
of premium ceded, but
with heavy exposure
(e.g. general third party
liability);
it
also
depends on the type of
reinsurance cover and
of
the
recoverable
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limits. Same concept
may apply to facultative
placements.
However
decision has been taken
not to base reporting on
a material threshold or
proportionality, to allow
data to be significant
and properly usable as
a whole.
See also 195
210.
UNESPA –
Association of
Spanish Insurers
Re – J2Materiality
Nevertheless, there should be a materiality threshold, e.g. programs
above 5% or premiums.
See also comment 208
and 195
211.
CEA
Re – J2Purpose
Clarification would be helpful as to whether this template is
applicable to life business.
See LOG; item “General
comment”.
212.
German Insurance
Association (GDV)
Re – J2Purpose
Clarification would be helpful as to whether this template is
applicable to Life business.
See also comment 211
213.
Deloitte Touche
Tohmatsu
Re – J3- cell B1
If codes are to be provided by EIOPA will this require companies to
send in details of the counterpary in advance for EIOPA to develop
the codes. A timeline will need to be put in place to allow companies
gather the relevant data and an indication of when the codes will be
made available frion EIOPA.
Codes will be available
in the longer term, it is
EIOPA's responsibility
See also comments 8
and 10.
See also comment 229
215.
RSA Insurance
Group plc
Re – J3- cell B1
Details on such codes need to be produced as soon as possible (how
these will be made available and by when), to help undertakings
develop their processes.
See also comment 213
216.
German Insurance
Re – J3- cell C1
There needs to be a clearly defined set of references for reinsurers,
See also comment 215
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Association (GDV)
such as NAIC or LORS codes, to avoid misunderstandings.
217.
Federation of
Finnish Financial
Services
Re – J3- cell D1
Better definitions needed. Some companies use the same legal entity
for both direct insurance (=insurer) and assumed treaty reinsurance
(=reinsurer).
Type of reinsurer to
whom the underwriting
risk
has
been
transferred. The official
name
of
the
riskbearing
reinsurer
is
stated
in
the
reinsurance contract. If
the same legal entity
(insurer/reinsurer)
is
stated in the company
reinsurance
contract
then the same nave
should be used.
218.
German Insurance
Association (GDV)
Re – J3- cell D1
We believe the list should also include a category to capture
‘Fronting’ type arrangements.
Fronting arrangements
cannot be separated
because
the
undertaking
still
underwrites the risk and
acts as a risk carrier.
Further clarification required:
Clarification and guidance will be necessary to ensure
consistency of definitions on an undertaking by undertaking basis.
For example, one undertaking might internally categorise themselves
as an insurer, but from another undertaking perspective it may be
categorised as an external reinsurer.
See also comment 217
There is separate SPV
QRT.
Better definitions needed. Some companies use the same legal entity
for both direct insurance (=insurer) and assumed treaty reinsurance
(=reinsurer).
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According to Doc one of the possible attributions is SPV. How is that
possible although having a seperate QRT for SPV?
219.
RSA Insurance
Group plc
Re – J3- cell D1
See “General” above – we believe that the “IRE” option should not be
made available for the group return.
Noted.
220.
German Insurance
Association (GDV)
Re – J3- cell F1
Development of systems will be necessary to ensure consistency in
the approach between ratings/agencies reported across both Assets
templates and Reinsurance templates.
See also comment 321
Further clarification required:
We believe it is unclear which rating should be used. For
example, the same as for Counterparty default or is it optional? We
express preference to use the same rating as used for counterparty.
If more than one rating is available for a reinsurer, which one
would take precedence?
221.
German Insurance
Association (GDV)
Re – J3- cell G1
222.
PwC
Re – J3- cell G1
223.
Deloitte Touche
Tohmatsu
Re – J3- cell H1
Please refer to RE – J3 – cell F1.
See also comment 321
Question is not clear.
If codes are to be provided by EIOPA will this require companies to
send in details of the counterpary in advance for EIOPA to develop
the codes. A timeline will need to be put in place to allow companies
gather the relevant data and an indication of when the codes will be
made available frion EIOPA.
We
need
the
specification
of
the
name of the Broker, to
assess the counterparty
risk related to the
specific reinsurer, and
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the
name
of
the
reinsurer, to know to
which intermediary the
transfer of risk has
been
outsourced.
Timeline will be put in
place from EIOPA.
224.
German Insurance
Association (GDV)
Re – J3- cell H1
Purpose of reporting by broker is not clear. Even in the case of
placement, the risk will be with the reinsurer and not with the broker.
Does the report require the specification of both the name of the
Broker and the Reinsurer or can the name of the reinsurer be left out
if the Broker is specified.
See also comment 223
and 323
225.
ING Group Data
modelling team
Re – J3- cell H1
Purpose of reporting by broker is not clear. Even in the case of
Placement, the risk will be with the reinsurer and not with the broker.
Does the report require the specification of both the name of the
Broker and the Reinsurer or can the name of the reinsurer be left out
if the Broker is specified?
See also comment 224
226.
RSA Insurance
Group plc
Re – J3- cell H1
We do not understand why this is being requested when the
reinsurer’s details are requested elsewhere on the form.
See also comment 224
See cell B1 above also.
227.
German Insurance
Association (GDV)
Re – J3- cell I1
Please refer to RE - J3 – cell H1.
228.
Association of
British Insurers
(ABI)
Re – J3- cell J1
It is essential to understand whether this is going to be a closed list
selected by EIOPA or not. Please clarify this.
CFO Forum & CRO
Re – J3- cell J1
229.
It is essential to understand whether this is going to be a closed list
See also comment 224
See also comment 217
Activity code broker is
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Forum
selected by EIOPA or not. Please clarify this.
the result of the EIOPA
code and will be a
closed list where the
activity codes can be
combined.
230.
German Insurance
Association (GDV)
Re – J3- cell J1
Please refer to RE - J3 – cell H1.
See also comment 224
231.
German Insurance
Association (GDV)
Re – J3- cell L1
Further guidance is required on completing this field and whether this
should be on a best estimate basis, the reinsurance recoveries
relating to claims provisions, cash flow without discounting, present
value of cash flows, i.e. including discounting effects.
See definition in LOG
file:
Share
of
the
reinsurer
in
the
recoverables
from
reinsurance
(including
Finite Re and SPV)
before the adjustment
for expected losses due
to
the
counterparty
default, in the best
estimate of the claims
provisions.
Amount
must be in line with the
item of the same name
mentioned in Template
TP-E1 (Non-Life and
Health
non-SLT
Technical Provisions).
Best estimates adjustments are calculated actuarially at the
population level. Is there an expected treatment to apply/subdivide
this adjustment to individual reinsurers as we feel this will be
spurious accuracy given the uncertainty surrounding the gross claims
best estimates values?
With regard to the reinsurance recoverables of technical provisions
we note that the draft Implementing Measures (Level 2) allows in the
context of Article 47 TPS1 and 48 TPS2 a simplified calculation which
is in contrast to the presentation by counterpart in cells K1, L1 and
M1 of Template Re – J3.
This comment also applies to cells K1 and M1 of Re-J3.
“Share of the reinsurer
in
the
recoverables
from
reinsurance
(including Finite Re and
SPV)
before
the
adjustment
for
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expected losses due to
the
counterparty
default, in the best
estimate of the claims
provisions.
Amount
must be in line with the
item of the same name
mentioned in Template
TP-E1 (Non-Life and
Health
non-SLT
Technical Provisions).”
See also 326
232.
The Phoenix Group
Re – J3- cell L1
Best estimate adjustments are calculated actuarially at the
population level. Is there an expected treatment to apply/subdivide
this adjustment to individual reinsurers as we feel this will be
spurious accuracy given the uncertainty surrounding the gross claims
best estimates values?
See also comment 231
233.
German Insurance
Association (GDV)
Re – J3- cell M1
Please refer to RE – J3 – cell L1.
See also comment 231
235.
ANIA Reinsurance
Working Group
Re – J3- cell O1
Please clarify the composition of this item, particularly please define
if premiums ceded to the Reinsurers are deemed to be included in
the calculation.
O1 is the result of
claims paid by the
insurer but not yet
reimbursed by the
reinsurer +
commissions to be paid
by the reinsurer + other
receivables minus debts
to the reinsurer. Cash
deposits are excluded
and should be
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considered as
guarantees received.
Total amount must be
equal to the sum of the
balance sheet items:
Reinsurance receivables
and Reinsurance
payables.
236.
Crédit Agricole
Assurances
Re – J3- cell O1
Could you indicate the exact cells to be reconciled between the BSC1 and J3 templates regarding net receivables ?
O1 is a cell composed of
several
variables;
therefore
the
cell
cannot be identified in
BS-C 1. Cells which can
refer to O1 is A20, L13,
and L15B.
237.
German Insurance
Association (GDV)
Re – J3- cell O1
Assumption that this number is equivalent to reinsurance debtors
may lead to the risk of double-counting as reinsurance debtors are
included within the undertakings calculations for reinsurance
premiums and claims reserving.
See also comment 235
and 236
In the situation where amounts are due via a broker, not directly
from a reinsurer, we ask that EIOPA clarify how such amounts are to
be presented in this template.
239.
RSA Insurance
Group plc
Re – J3- cell O1
In the situation where amounts are due via a broker, not directly
from a reinsurer, it needs to be clarified how such amounts are to be
presented in this form.
240.
AMICE
Re – J3- cell P1
Guarantees received: Assets pledged by reinsurer
Whether reinsurance
contracts go through a
broker or not, this will
not affect the O1's
value.
Cell P1 is to be filled if
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Guarantee provided by the state for contracts concluded with some
public institutions ( i.e with Caisse Centrale de Réassurance in
France).
241.
German Insurance
Association (GDV)
Re – J3- cell P1
Reporting this information will require some effort to develop the
appropriate systems and processes.
the undertaking makes
a pledge, otherwise the
guarantee is to consider
under the terms of the
cell Q1.
See also comment 329
Further clarification required:
More detailed definitions are required for “Asset pledge” and
“financial guarantees” in order to better understand the differences
between the two
How are Letters of Credit allowed for? The assets are not
necessarily pledged but are contingent.
243.
PwC
Re – J3- cell P1
Question is not clear.
Part of the value of Q1
must be included in C37
and C38 in the sheet
OF-B1A
244.
Crédit Agricole
Assurances
Re – J3- cell Q1
Is a check with the OF-B1A template expected? (regarding financial
guarantees and especially letters of credit)
245.
German Insurance
Association (GDV)
Re – J3- cell Q1
We question whether parental guarantees given in support of
reinsurer subsidiaries should be included in this field?
Yes
247.
Crédit Agricole
Assurances
Re – J3- cell R1
Could you indicate the exact cells to be reconciled between the BSC1 and J3 templates regarding cash deposits ?
A13 in BS-C1
248.
German Insurance
Association (GDV)
Re – J3- cell R1
Reporting this information will require some effort to develop the
appropriate systems and processes.
More clarification will be
provided.
See also comment 330
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See also comment 331
Further clarification required:
More detailed definitions are required for “Asset pledge” and
“financial guarantees” in order to better understand the differences
between the two
How are Letters of Credit allowed for? The assets are not
necessarily pledged but are contingent.
250.
CEA
Re – J3- Costs
Additional costs will be incurred through the need to include
additional data items. For example: EIOPA codes and names of
Reinsured; Reinsurer and Broker; Type of reinsurer.
Without the requested
additional
information
collected data might not
be properly processed
and therefore would not
be useful.
251.
Deloitte Touche
Tohmatsu
Re – J3- Costs
The detailed required is information readily available to the company
but requires extraction of data from several different sources and will
also require continuous maintenance and for the data streams to
reconcile. Systems need to be able to cross check with technical
provision forms. Even though a company may already maintain this
data, the cost of correlating and monitoring the data may be
significant. The level of detail required will be burdensome for a small
entity.
Small insurers are not
expected to have large
and
complex
reinsurance programs;
therefore, this report
does not have major
impact
on
small
entities.
The
information
is
necessary
for
all
supervisors to perform
their work.
See also comment 250
252.
German Insurance
Re – J3- Costs
Additional costs will be incurred through the need to include
See also comment 250
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Association (GDV)
additional data items. For example: EIOPA codes and names of
Reinsured; Reinsurer and Broker; Type of reinsurer.
253.
RSA Insurance
Group plc
Re – J3- Costs
See “Materiality” below.
See also comment 250
254.
UNESPA –
Association of
Spanish Insurers
Re – J3- Costs
Reinsurers expects costs to be high.
See also comment 250
255.
A.M. Best Europe Rating Services Ltd
Re – J3Disclosure
Public disclosure essential in order to understand a company’s credit
risk. Useful to identify/assess: a reinsurer’s exposure to ceding
companies exposed to particular material catastrophe / large risk
losses; exposure of a ceding company to a particular reinsurer
(especially if the reinsurer is encountering financial difficulties); and
concentration of exposure to a particular reinsurer.
No disclosure for J3
This information is currently available in regulatory returns both
inside and outside the EEA, including the FSA and NAIC returns.
Information that should be made public: at least A1-EI, N1 and S1.
256.
CEA
Re – J3Disclosure
257.
German Insurance
Association (GDV)
Re – J3Disclosure
258.
ANIA Reinsurance
Working Group
Re – J3Frequency
In combination with Template RE J2, we suggest a half-yearly report,
since a quarterly resubmission could be a heavy burden for the
companies.
Re-J2
will
be
resubmitted half-yearly.
259.
Association of
British Insurers
(ABI)
Re – J3General
We expect that collecting the information for every single
Reinsurance treaty would be costly and burdensome. We suggest
that there should be a materiality threshold.
No materiality threshold
for J3 –
NSA
will
information
use
the
about all
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reinsurers, we need to
know how much of the
reinsurance programs is
transferred to whom
and
how.
This
information
will
be
compared
with
the
companies'
counterparty risk.
260.
CEA
Re – J3General
Any calculation on reinsurance recoverables for single reinsurers can
only be carried through by using approximations. Detailed
calculations would represent a disproportionate burden especially for
undertakings that are small and medium, in terms of nature, size and
complexity.
Reconciliations to Solvency II balance sheet must be embedded in
the process and as such the definitions in the template should be the
same as in the Counterparty Default Risk module to avoid confusion.
We believe that the split of reinsurance share of Solvency II technical
provisions by counterparty would be problematic for quota share
contracts, special systems would be required to handle reporting of
this information.
Further clarification required:
Clarification on whether to report active reinsurance would be
welcome.
1) Calculation is a
specification of the
recoverables from
reinsurance, before
the adjustment for
expected losses due
to the counterparty
default, in the best
estimate of claims
provisions and
necessary to
calculate the net
claims provisions.
Without this
template the
counterparty risks
towards the
individual reinsurers
can not be
evaluated.
2) Agree.
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Should ‘fronting insurance’ be reported in this template?
The balancing of net receivables between insurer and
reinsurer is done according to treaty conditions and usually within the
months after the end of each quarter of the year. It was questioned if
net receivables, for example, net receivables for 4th quarter balanced
as at 28.2.2010 should also be reported in this template? We query
how to address the situation of undertakings with different ratings
within the same group?
3) See also comment
1).
4) Clarification:
a. The template
shows the
exposures at
reinsurers
through
reinsurance of
direct business
(cession) and
active
reinsurance
(retrocession) as
well. I.e. all
outgoing
reinsurance
activities.
b. When accepted
fronting
insurance is
reinsured and
leads to
exposure at
reinsurers, it
must be
reported. See a)
c. The exposure
reflects the
situation at 31st
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of December and
must be in line
with the balance
sheet and
correlated
templates.
d. Rating is based
at an entity
level.
261.
CFO Forum & CRO
Forum
Re – J3General
We expect that collecting the information for every single
Reinsurance treaty would be costly and burdensome. We suggest
that there should be a materiality threshold.
There are very complex Excelss of Loss, Facultative and Quota share
treates programsand it is very difficult to obtain this type of
information particularly with CAT.
It should also be noted theat there are instances where there is
accepted insurance as well assigned insurance deals which lead to
such information being having to be netted off which further
complicates the compilation of the data.
1) Introducing of a
threshold may lead
to a lack of
information in
monitoring the
credit risk when a
lot of smaller
reinsurers are
affected by a major
catastrophe and
probably go into
default. This
happens in the early
90-ties with the
European
windstorms of 1990
and Hurricane
Andrew of 1992.
Furthermore a
specification per
reinsurer is needed
to evaluate the
impact of a possible
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default at the
financial stability at
a local and
European level.
2) Calculation is a
specification of the
recoverables from
reinsurance, before
the adjustment for
expected losses due
to the counterparty
default, in the best
estimate of claims
provisions and
necessary to
calculate the net
claims provisions.
Without this
template the
counterparty risks
towards the
individual reinsurers
can not be
evaluated.
3) See 2)
262.
Crédit Agricole
Assurances
Re – J3General
Could you outline which cells must be checked with the BS-C1
template?
See also comment 236
263.
Danish Insurance
Association
Re – J3General
We find it excessive to report such detailed information on an
undertaking’s reinsurance contracts. With this template EIOPA will be
very close to actually managing part of the underwriting business.
Reporting E7A on a net retention basis seems excessive when an
This problem is solved
in Denmark; there is no
big difference between
the
reposting
for
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undertaking’s reinsurance programme is to be reported with a high
level of detail within the J1, J2 and J3-templates. Furthermore an
undertaking’s reinsurance profile is described in the RSR.
reinsurance now and
the future reporting.
The description in the RSR should provide a sufficient overview of the
reinsurance programme, since the supervisors will have access to
every transaction during inspections.
The level of detail demanded in the J-templates will lead to a huge
workload resulting in several hundred pages for major undertakings.
It is not clear to us that the supervisors need such a load of
information to properly supervise.
264.
German Insurance
Association (GDV)
Re – J3General
Any calculation on reinsurance recoverables for single reinsurers can
only be carried through by using approximations. Detailed
calculations would represent a disproportionate burden especially for
undertakings that are small and medium, in terms of nature, sizeand
complexity.
Nature,
Scale
and
complexity are taken in
to account.
See also comment 260
and 261
Reconciliations to Solvency II balance sheet must be embedded in
the process and as such the definitions in the template should be the
same as in the Counterparty Default Risk module to avoid confusion.
We believe that the split of reinsurance share of SII technical
provisions by counterparty would be problematic for quota share
contracts, special systems would be required to handle reporting of
this information.
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Further clarification required:
Clarification on whether to report active reinsurance would be
welcome.
Should ‘fronting insurance’ be reported in this template i.e.
captives?
The balancing of net receivables between insurer and
reinsurer is done according to treaty conditions and usually within the
months after the end of each quarter of the year. It was questioned if
net receivables, for example, net receivables for 4th quarter balanced
as at 28.2.2010 should also be reported in this template? We query
how to address the situation of undertakings with different ratings
within the same group?
Some undertakings point out that this template would lead to
burdensome calculations and data re-elaborations. They call for a
simplification.
265.
KPMG
Re – J3General
266.
PwC
Re – J3General
267.
RSA Insurance
Group plc
Re – J3General
We welcome the inclusion of explicit references to other QRTs in
some of the cells of the template to allow an easier reconciliation of
the amounts across different QRTs.
See also comment 260
and 261
Question is not clear.
We note that there are references to “treaties” in the LOG;
presumably this is incorrect, so amendments are needed to avoid
confusion.
Looking at the LOG the
question is not clear.
For groups, it is not clear whether intra-group arrangements still
need to be disclosed. Given the existence of form IGT3, we believe
such arrangements ought not to be reported in Re-J3, which would
also mean that the column totals will agree to the consolidated
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balance sheet.
268.
The Directorate
General Statistics
(DG-S) of the E
Re – J3General
Please refer to Re - J1- General
269.
The International
Group of P&I Clubs
Re – J3General
Form J3 requires an analysis of reinsurance recoveries by individual
counterparties. This will be particularly onerous for insurers that
have significant reinsurance recoveries split over multiple
counterparties and policy years. The majority of P&I Clubs, for
example, have reinsurance recoveries going back over many policy
years and the number of counterparties therefore runs into the
hundreds. We question what a supervisor would do with this volume
of information that could not be achieved with a much simpler
summary.
The
information
requested from NSA, is
essential. All NSAs are
ready to process and
use the information.
270.
The Phoenix Group
Re – J3General
Is the information to be reported here gross or net of Internal
Reinsurance?
Noted
271.
Thomas Miller & Co
Ltd
Re – J3General
It seems to be overly onerous to require the disclosure of reinsurance
recoverables by reinsurer. Potentially a very large amount of
reinsurers over a number of policy years could be required to be
disclosed. It is also unclear how to tread Lloyds reinsurers ie. Should
Lloyds be one single reinsurer, or should Lloys be further broken
down into the syndicates that reinsures the risk.
Lloyds should be further
broken down into the
syndicates that reinsure
the risk.
Instead of disclosing the required information by reinsurer, would the
IFRS disclosure by credit rating not be more appropriate?
No
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272.
CEA
Re – J3- Groups
The issue of reporting ratings at group level could be problematic.
We propose that an aggregate approach be adopted, the following is
an example of how this could be broken down:
Reporting grade:
Percentage of the reinsurance undertakings
AAA
15%
AA
55%
BBB
30%
Calculation is a
specification of the
recoverables from
reinsurance, before the
adjustment for
expected losses due to
the counterparty
default, in the best
estimate of claims
provisions and
necessary to calculate
the net claims
provisions. Without this
template the
counterparty risks
towards the individual
reinsurers cannot be
evaluated.
There will be no
aggregation on ratings.
273.
German Insurance
Association (GDV)
Re – J3- Groups
The issue of reporting ratings at group level could be problematic.
We propose that an aggregate approach be adopted, the following is
an example of how this could be broken down:
Reporting grade:
There
will
be
no
aggregation on ratings.
Percentage of the reinsurance companies
AAA
15%
AA
55%
BBB
30%
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274.
CEA
Re – J3Materiality
A materiality clause should be introduced to report only the 10
largest reinsurers, this would prevent the need for every item to be
reported, regardless of its relative size. We believe this is an
example of how proportionality could be applied to reporting
templates.
Introducing
of
a
threshold may lead to a
lack of information in
monitoring the credit
risk when a lot of
smaller reinsurers are
affected by a major
catastrophe
and
probably
go
into
default. This happens in
the early 90-ties with
the
European
windstorms of 1990 and
Hurricane Andrew of
1992. Furthermore a
specification
per
reinsurer is needed to
evaluate the impact of a
possible default at the
financial stability at a
local
and
European
level.
275.
German Insurance
Association (GDV)
Re – J3Materiality
A materiality clause should be introduced to report only the 10
largest reinsurers, this would prevent the need for every item to be
reported, regardless of its relative size. We believe this is an
example of how proportionality could be applied to reporting
templates.
There will no materiality
clause.
See
also
comment 260 and 261
277.
RSA Insurance
Group plc
Re – J3Materiality
The proposal that no materiality threshold is to exist would lead to all
small items being reported, no matter how
trivial/insignificant/disproportionate they might be.
See also comment 261
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Further, in our recent dry-run exercise, the consolidated J3 form ran
into over 3,000 lines of data, or 150 pages of A4.
We believe such disclosure is not compliant with the Level 1 and 2
texts’ provisions on proportionality.
We propose that items less than 5% of the total should be reported
in aggregate.
278.
CEA
Re-J1- cell A00
Clarification is required on the LOB category to be used when
reporting this template. The perspective will be different depending
on whether the undertaking is a reinsurer or cedent.
For example, the Reinsurer would look at a contract from the point of
view of the reinsurer and classify the contract as “accepted
reinsurance”, however based on the viewpoint of the ceding
undertaking, the reported LOB will be index-linked and unit-linked.
1) Agree. Will be
explained in final
LOG including a
reference to the
final Level 2 text.
2) See also comment
1).
3) See also comment
1).
This comment also applies to TP-E7A – cell D1, Re – J1 – cell A01
and Re – J2 – cell H1.
279.
CEA
Re-J1- cell A01
Clarification would be helpful as to whether the LOB is to be defined
as the primary insurance LOBs. If this is not the case, supervisory
guidance will be necessary.
Agree. Explained in final
LOG including a
reference to the final
Level 2 text.
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280.
CEA
Re-J1- cell AA11
For “Facultative ceded Reinsurance Premium” and “Facultative
Reinsurance Commission”, we question the supervisory purpose for
requesting this information as we do not believe it is relevant for
evaluating the effectiveness of the reinsurance program.
We propose to delete the word “reinsurance” from the LOG definition.
281.
CEA
Re-J1- cell AB1
For “Facultative ceded Reinsurance Premium” and “Facultative
Reinsurance Commission”, we question the supervisory purpose for
requesting this information as we do not believe it is relevant for
evaluating the effectiveness of the reinsurance program.
We propose to remove “reinsurance” from the definition in LOG
document to make it clearer.
282.
CEA
Re-J1- cell AC1
283.
CEA
Re-J1- cell C1
We believe that the LOG definition is unclear.
Further clarification required:
What is the purpose of the unique code in C1 compared with
the unique code in cell B1?
1) Premium and costs
are the elements
through which the
reinsurance cover
can be judged.
2) Don’t agree.
Premium will be
booked as
reinsurance
premium.
1) Premium and costs
are the elements
through which the
reinsurance cover
can be judged.
2) Column header will
be “Facultative
reinsurance
premium” and the
LOG was adapted.
1) EIOPA has improved
the LOG.
2) Further clarification:
a) B1 is a unique
undertaking
specific and
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The text in the LOG suggests all items that have been in force
at any point in the reporting period not just those in force for the full
period, as described in the general comment for this template, should
be included. Clarification would be helpful on this point.
identifying
number for the
risk accepted. C1
is reflecting the
sequence
number of the
facultative
placement.
b) J1 will give on a
prospective basis
all covers that
start in the
coming year
(active on 1/1 or
after) including
the risks that are
underwritten but
not have been
started when
filling the
template. J1 will
be resubmitted
at the end of the
year if actual top
10 covers,
started during
the year, differ
from what was
expected in
initial J1.
284.
CEA
Re-J1- cell C11
We believe that the LOG definition is unclear.
See also comment 283.
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Further clarification required:
What is the purpose of the unique code in C1 compared with
the unique code in cell B1?
The text in the LOG suggests all items that have been in force
at any point in the reporting period not just those in force for the full
period, as described in the general comment for this template, should
be included. Clarification would be helpful on this point.
285.
CEA
Re-J1- cell D1
It is unclear whether these codes will be determined by the
undertaking or EIOPA; clarification would be helpful on this matter.
The facultative
reinsurance placement
identification code is
entity specific.
286.
CEA
Re-J1- cell H1
We are concerned over the level of detail required in this template, in
particular for facultative policies covering property portfolios. Would
this be required at individual building level? If so, this would create
some significant issues with regards to data privacy and
commercially sensitive information.
The principle is to
reflect the individual
underwriting risk which
means for property at
the level of an
individual building. This
in line with the
determination of the
Net SCR for catastrophe
risks.
287.
CEA
Re-J1- cell I1
We query what should be included under “line of activity”? Further
guidance should be given as to whether this is a sub-category of “line
of business”.
1) This is undertaking
specific and gives
the undertaking the
possibility to specify
the cover of the risk
for a specific
The text in the LOG refers to “treaty” which is not relevant for
facultative reinsurance, this should be corrected.
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Our understanding of the expression “entity specific” is that the
undertaking would be free to use whatever description is used in its
database to better qualify the risk. More guidelines on this issue
would be appreciated.
internal sub line of
business.
2) Text has been
adapted.
3) Undertaking is free
to use any
description.
288.
CEA
Re-J1- cell L11
As parts of the portfolio are assessed approximately by using specific
assumptions, differentiation per LOB may be difficult.
Agree. This depends on
the cover. Some
individual risks might
appear in more LOBs.
289.
CEA
Re-J1- cell M1
We do not believe that reporting the whole sum insured would be
helpful for describing risk. For example, multiple businesses in
multiple cities.
1) The insured sum
relates to the
individual
underwriting risk. A
facultative cover
comprising a
number of buildings
across the country
must therefore be
broken down.
Further clarification required:
We query whether the sum insured refers to each risk, for
example location, or by an event?
Does sum insured include deductibles?
2) Clarification:
a) Sum insured
refers to each
individual risk,
for example
location.
b) Sum insured
does not include
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the original
deductible at
policy level.
290.
CEA
Re-J1- cell M11
Risk capital is defined as insured capital less provision for insurance
liabilities; it is not clear whether the insurance liabilities are based on
Best Estimates or Best Estimates + Risk Margin or some other
definition. Clarification would be helpful.
Risk capital is insured
capital less amount for
technical provisions
based on best
estimates.
291.
CEA
Re-J1- cell N1
In some cases, facultative reinsurance covers more than one
Solvency II LOB. In such cases, splitting SI or PML would not be
straightforward.
1) Facultative cover
must be filled per
LOB, splitting the
corresponding data
reflecting the risk
per LOB.
This template refers to PML, where “normal functioning of prevention
measures” are assumed. In cases, undertakings underwrite their
business using an evaluation method (EML = estimated maximum
loss), where such measures are not assumed. Having to report using
PML would therefore not reflect the way the business is run, meaning
significant changes to data just for the purpose of supervisory
reporting. The principle of reporting information should be consistent
with the way the business is run.
Also, we do not find that the LOG is compatible with the way in which
undertakings calculate EML. The essential difference is that
undertakings do not take in to account all factors likely to lessen the
extent of the loss. For example, when calculating a fire EML for
property – in EML estimates, no allowance is made of active fire
protection systems, such as sprinkler protection. Taking in to account
all factors likely to lessen the extent of the loss would be more
consistent with Normal Loss Expectancy (NLE) assessment.
2) EIOPA described a
default definition for
EML and PML based
on best practice in
the industry.
Undertaking specific
definitions must be
clarified in the
Narrative report
under Underwriting
Risk (Section C Risk profile).
3) Definitions are
based on broker’s
information. The
definitions for MPL
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Although the terms EML and NLE may vary between undertakings,
the disregard of active protection systems is a fundamental aspect of
the EML assessment.
We would ask that EIOPA clarify that the definitions used are
consistent with accepted terminology.
The LOG refers to the situation where a PML is not applicable to a
LOB. We would ask that EIOPA provide details of the LOB to which
PML (or EML) would not be applicable.
292.
CEA
Re-J1- cell Q1
Including additional fields such as this will increase costs.
We query how the list of codes will be maintained and what
contingency will be in place should a code not exist for a particular
reinsurer.
and EML have been
accepted by CEA in
1999.
4)
The use of an
MP/PML/EML model
is not obligatory but
the result of (local)
common practice
and therefore can
not be prescribed
per LOB.
1) Without the
requested additional
information
collected data might
not be properly
processed and
therefore would not
be useful.
2) See also comment
10.
293.
CEA
Re-J1- cell W1
Including additional fields such as this will increase costs.
See also comment 292.
We query how the list of codes will be maintained and what
contingency will be in place should a code not exist for a particular
broker.
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294.
CEA
Re-J1- cell W11
There are no cells for U1 and V1 therefore we have provided
comments in this cell: clarification would be helpful on what rating
information EIOPA will provide for cells U1 and V1?
Is explained in final
LOG.
295.
CEA
Re-J1- Costs
While the required data is generally available (directly/indirectly),
additional costs will be incurred in aligning internal systems with the
required EIOPA codes.
Without the required
EIOPA codes the
collected data might not
be properly processed
and therefore would not
be useful.
296.
CEA
Re-J1- General
The net share could be the same for a number of the top ranked
facultative covers which raises the question, how to treat the policies
if, for example, there are more than 10 and also, how would they be
ranked/chosen. A significant amount of work would be required to
identify the ten policies with biggest net share of risk capital across
each LOB and, as some LOBs may be relatively small, it may not be
proportionate to require the “top 10” by LOB. Reporting of the 10
biggest risks across all LOBS was suggested as an alternative or to
specify a materiality threshold at business level.
1) There shall be one
separate template
for each LoB. For
each LoB, a
selection must be
made of the 10
most important risks
in terms of
reinsured exposure.
Facultative risks do
not fit in the regular
policy acceptance
and therefore should
be well known and
require special
(administrative)
treatment by the
undertaking to
reflect the inherent
We query the supervisory purpose of requesting only LOBs with
facultative risks, if the purpose is to evaluate the vulnerability of a
single risk event, we propose to report the 10 (or 20) largest single
risks, gross of reinsurance, and investigate whether or not the risk is
partially covered with facultative reinsurance. Probable Maximum
Loss could be used as an assessment indicator, only facultatives for
specific LOB will always be on the list (where PML is required and/or
with the highest self-retentions).
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risks.
It is said (General Comment) that this template “is prospective for
the selected facultative covers that start in the coming year (active
on 1/1 or after) and are known when filling the template. Re-J1 will
be resubmitted at the end of the year (31/12)”.
At present, similar information is reported to some supervisors in
March of any given year (based on 31/12 year end), in respect of the
top 10 facultative placements in force during the year before for each
line of business.
In this way the picture is always complete and there is no need to
refresh it at a later stage. Given the fact that the facultative book is
relatively stable over the time and also considering the purposes of
the report, we recommend that this template should be submitted by
31 March (or any other date after) of any given year showing
information about the facultative placements in force during the year
before. The picture would be complete, accurate and up-to-datewithout need to have it re-taken at the end of the year.
The term Facultative generally means reinsurance for one single risk
as opposed to treaty which is reinsurance of portfolio. Facultative
reinsurance is also commonly used as a mechanism in industrial
insurance in various risk sharing solutions. This template appears
more applicable to ‘industrial insurance’ where there is a high level of
facultative risks. For the risk management of other insurers, we
believe it is more important to concentrate on risks which are not
covered by a reinsurance undertaking.
2) The individual
facultative risks are
not part of the ‘J2 –
Outgoing
reinsurance program
in the next reporting
year’. Additional
information is
needed to supervise
the materiality of
the facultative risks
per LOB as part of
the underwriting
policy (including the
impact of the
MPL/PML/EML model
used) and the
possible exposure
towards the
reinsurers.
3) Don’t agree. Also
facultative covers
may switch between
insurers or accepted
by ‘new’ entities
entering the market.
4) Risks not covered by
reinsurers may
appear in TP-E7A.
5) Unfortunately initial
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Systems and reporting tools would need to be developed to enable
lean and high quality reporting of this template. The information
requested in this template is often not held directly by undertakings.
Overall we believe that this template would lead to burdensome
calculations and data re-elaborations. A more simplified approach
would be beneficial.
Further clarification required:
It is not clear in the revised templates how to report
reinsurance shared between reinsurers. Further guidance is required
on whether separate lines should now be included for each reinsurer
making up a single reinsurance item.
Risk capital (Life) is defined as insured capital less provision
for insurance liabilities; it is not clear whether the insurance liabilities
are based on Best Estimates or Best Estimates + Risk Margin or
some other definition. Clarification would be helpful.
It is not clear how to treat reinsurance contracts not covering
the full entity.
It needs to be made clear whether claims and reinsurance
figures for all templates are on either i) a booked basis within the
systems or ii) a best estimate or iii) best estimate plus risk margin.
Definition of FAC: Are Reverse Flow and Co-reinsurance
programs with Limit/SI/EML for single client exceeding Treaty limit or
totally outside treaty, to be regarded as facultative reinsurance and
be included in this section?
operational costs
can not be
prevented. Without
the requested
additional
information
collected data might
not be properly
processed and
therefore would not
be useful. See also
1).
6) Further clarification:
a) One cover with
10 reinsurers
with a 10%
share will give
10 additional
lines in this
template.
b) Risk capital is
insured capital
less amount for
technical
provisions based
on best
estimates.
c) Remark is not
clear.
d) Adapted for all
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templates.
e) Yes, only if the
risk is not part of
a treaty that
already appears
in J2 (e.g.
Facultative
Obligatory
treaties or
similar);
297.
CEA
Re-J1Materiality
Most facultative purchases are concentrated within a few lines of
business, this means there will be a number of LOBS which will only
have one or two risks. Unless a materiality threshold is applied, the
template would require reporting of very small risks in respect of
those LOBs for which few facultative covers are obtained.
For most undertakings
acceptance of
facultative risks have a
material impact at the
net SCR for
underwriting risks and
therefore the facultative
(peak) risks per LOB
must be reported.
298.
CEA
Re-J1- Purpose
We question to what extent the template will address its stated
purpose i.e. providing insight into the risk profile of the undertaking
on basis that risk is managed and mitigated in a more holistic way,
looking at extracts of data in isolation may not adequately reflect
this.
For most undertakings
acceptance of
facultative risks have a
material impact at the
net SCR for
underwriting risks and
therefore the peak risks
must be reported. In
addition single risk
events are part of net
SCR for Catastrophe for
some perils.
The adequacy of overall capital needs could be better addressed
through an undertaking’s ORSA and other Pillar II processes.
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299.
CEA
Re-J2- cell AA1
We question the distinction between reinsurance commission and
overriding commission.
300.
CEA
Re-J2- cell AB1
Please refer to RE – J2 – cell AA1.
Reinsurance
commission is the
commission normally
paid to insured from the
reinsurer; overriding
commission could be a
further condition
representing an
additional cost for
reinsurers: it is
normally geared to
treaty performance.
Information from cell
Z1 to AF1 needed for
both identification and
understanding of
reinsurance and its
purpose, cost,
adequacy; identification
and appreciation are
needed to be able to
evaluate perspective
impact of BS and
overall reinsurance
policy and exposure to
credit risk; premium
paid for reinsurance and
exposure there under
are of great importance.
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301.
CEA
Re-J2- cell AC1
Please refer to RE – J2 – cell AA1.
Please see comment
300
302.
CEA
Re-J2- cell AD1
Please refer to RE – J2 – cell AA1.
Please see comment
300
303.
CEA
Re-J2- cell AE1
Please refer to RE – J2 – cell AA1.
Please see comment
300
304.
CEA
Re-J2- cell AF1
Please refer to RE – J2 – cell AA1.
Please see comment
300
305.
CEA
Re-J2- cell AP1
Please refer to Re-J2 – General – only estimates will be available for
contracts relating to the next reporting year.
Template should include
contracts in force as at
the date which will be
fixed for reporting
according to various
jurisdictions; treaties
that are not yet
renewed but expected
to be in force will be
submitted with either
expiring provisions or
expected provisions,
subject to variation as it
will be scheduled.
306.
CEA
Re-J2- cell AQ1
The “estimated reinsurance premium” will be difficult to value in
particular for XL and stop loss treaties.
As already explained in
the LOG, for non
proportional treaties the
estimated reinsurance
premium is the
premium which has to
Further clarification required:
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Should the estimated premium include the estimated impact
of new business in the year after the valuation?
Should there be some comparison with reinsurance premiums
paid / payable in the current financial year?
307.
CEA
Re-J2- cell C1
EIOPA should provide an indication as to when the codes will be
ready, undertakings will have to make the necessary amendments to
their systems.
be paid to reinsurers,
and calculated
according to treaty
wording conditions with
no other adjustment:
normally it is the result
of the application of the
rate of premium over
the Estimated subject
premium income; it
might be a flat amount
if the treaty provides for
the payment of a flat
premium
Each treaty must be
assigned a treaty
identification code that
identifies it exclusively
and must be maintained
in subsequent
communications.
This code is the original
treaty number
registered in the
company’s books. It is
undertaking specific and
will not be provided by
EIOPA
308.
CEA
Re-J2- cell D1
It is unclear whether a list of these will be provided by EIOPA or
determined by the undertaking?
If the question refers to
“Progressive section
number in treaty”, you
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should note that this
code is part of internal
procedures adopted for
registration of treaties
on the company’s
books. It is undertaking
specific and will not be
provided by EIOPA
309.
CEA
Re-J2- cell H1
Many of an undertaking’s reinsurance contracts will cover multiple
LOBs therefore an additional split per LOB will be very onerous.
How should treaties that include several LOBs be reported? For
example, event covers, usually incorporate FOP, MAT, MOC etc.
When deciding on the
purchase of
reinsurance, Companies
must be well aware for
risk management
purposes of the impact
on each LOB, also for
BS purposes; as a
consequence each
treaty must clearly be
build in such a way as
to allow correct
evaluation of how
recoveries will work;
therefore basic
conditions must be
clearly identified (limit,
premium, etc.) so as to
enable companies to
generate a section for
each LOB and/or type
treaty.
Information however
has to be provided to
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reflect what is provided
for by the treaty
wording. More detailed
instructions will be
provided through future
implementations of the
log or manual.
Availability of this
information is needed in
line with risk
management and
internal control
guidelines and rules.
310.
CEA
Re-J2- cell I1
The definition of this item is not clear. It has been assumed this is a
subcategory of a LOB. However the example in the LOG “Property”
implies otherwise.
This is referred to the
definition of the
portfolio which is the
scope of the treaty, i.e.
“commercial fire”,
“homeowners”,
“property”, etc.; this
definition is normally
part of the treaty
description.
311.
CEA
Re-J2- cell J1
“Working XL” and “Catastrophe XL” are not specific terms. Stop Loss
as a term is also used differently and is not specific. Definitions are
needed to cover these types of treaties.
1) It would appear that
your comment is
referred to the old
log which was part
of the informal
consultation. The log
distributed for this
public consultation
Type of reinsurance treaty value list as defined here is different from
the types defined on IGT3-J6. There should be one value list. The
value list does not seem to be covering all possible types (missing:
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Financial reinsurance) and we would expect some specific types for
Life reinsurance.
incorporates a more
detailed list which
encompasses the
real terminology
actually in use in the
reinsurance market;
please also note
that the terms
working and
catastrophe xl are
descriptive
definitions which
may be used for a
better
understanding in the
treaty description,
and are not included
in the list presently
proposed. Your
suggestions
concerning specific
types would be
welcome.
Consistency check with
IGT3-J6 will be done.
Information about the
financial/nontraditional/finite nature
of the displayed
reinsurance is granted
through use of cell G1,
in consideration of the
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fact that reinsurance of
financial nature may be
placed through virtually
any type of treaty.
312.
CEA
Re-J2- cell K1
We question the need to report this item due to the large costs
involved.
If comment refers to
catastrophic guarantee
then it is not clear to
which costs CEA refer.
Information hereunder
shows whether
reinsurance is covering
risks exposed to
catastrophic events. In
addition, availability of
this information is
needed in line with risk
management and
internal control
guidelines and rules to
enable top management
and Board of Directors
to monitor catastrophe
exposures.
313.
CEA
Re-J2- cell O1
There does not appear to be a LOG entry for this cell. Please refer to
Re-J1 cell N1.
See LOG item “Type of
underwriting model”.
Cell number in LOG will
be adapted
314.
CEA
Re-J2- cell Q1
The LOG states that the premiums paid for 100% of the treaty should
be stated – it is not clear how this would work where a treaty has
only been partially placed.
The amount to be
shown here is the
equivalent of the
reinsurance premium
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for 100%; it must
include possible
premium corresponding
to unplaced shares.
Answer to your question
in respect of unplaced
shares is outlined in the
example in the log
under cell AP1.
315.
CEA
Re-J2- cell R1
Further guidance on “N1.2 (%)” would be helpful.
Your comment now
refers to cells R1/S1 of
the template which
went in public
consultation;
information under R1
Aggregate deductibles
(amount) is to remain:
it indicates the amount
of the AAD that should
be considered before
operation of the Xl
treaty – it is a provision
of the treaty wording
according to which the
payment under the
cover will become due
when that part of claims
in excess of the
deductible exceeds a
stated figure in the
aggregate (otherwise
recoverable).
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Information under S1
Aggregate deductibles
(%) can be used when
the AAD is expressed as
a percentage (%).
316.
CEA
Re-J2- cell T1
Further guidance is required as to whether sub-limits are intended for
this item.
317.
CEA
Re-J2- cell V1
We believe that further guidelines should be developed for this
template to include examples for different reinsurance programs in
order to prevent misunderstanding.
For example, how (per LOB) a reinsurance program would be
reported, which contains quota share reinsurance, excess liability
reinsurance and Life XL-reinsurance.
Please find below an example for a Life Reinsurance Program:
Treaty
risk/event
Retention/Priority
Maximum/treaty
Limit
Maximum Cover per
Share of Reinsurer
Question is not clear;
anyhow this cell is
meant to be used to
indicate the amount of
the priority (retention)
of an excess of loss
treaty
1) See also 189 above;
in addition to it if a
reinsurance treaty
covers various LOBs
a separate input
must be made for
the various LOBs
(actually
representing
separate sections of
a wider treaty each
one with its own
limit and conditions,
etc.).
2) For example,
description should
be given in case of
conditions limiting
reinsurance
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Life Q/S
70%
25.000
25.000
30%
Life Surplus 0
250.000
250.000
2.000.000
3.000.000
100%
Life Cat XL/event
250.000
100%
recovery (as a non
exhaustive example,
if treaty limit can be
used only once).
More in depth
instructions will be
provided once
templates are
consolidated.
Further clarification required:
For certain types of reinsurance, the limits are applied to each
policy while for other types of reinsurance; limits may be applied to a
portfolio of policies. Should the presentation of amounts be made
consistent?
P1: Limit: there could be different limits for treaties or LOB, it
is not clear which one should be reported.
R1: Maximum cover per treaty: the definition in the LOG
specifies how to calculate this with the number of “free”
reinstatements. What happens when some reinstatements are not
free but at pre-defined rates?
318.
CEA
Re-J3- cell B1
EU-wide unique identification codes for entities provided by EIOPA
have not been published yet. These should be communicated well in
advance of entry into force of Solvency II.
Codes will be
determined by EIOPA.
Treatment of
(re)insurers without a
code is under discussion
and will be
communicated as soon
as possible.
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319.
CEA
Re-J3- cell C1
There needs to be a clearly defined set of references for reinsurers,
such as NAIC or LORS codes, to avoid misunderstandings.
Agree. EIOPA Code to
be determined.
320.
CEA
Re-J3- cell D1
We believe the list should also include a category to capture
‘Fronting’ type arrangements.
1) Fronting insurers
will be considered as
a Non-life or life
insurer.
Further clarification required:
Clarification and guidance will be necessary to ensure
consistency of definitions on an undertaking by undertaking basis.
For example, one undertaking might internally categorise themselves
as an insurer, but from another undertaking perspective it may be
categorised as an external reinsurer.
Also, some undertakings may use the same legal entity for
both direct insurance (=insurer) and assumed treaty reinsurance
(=reinsurer).
2) Clarification:
a) An undertaking
classified as an
internal or
external
reinsurer only
accepts
underwriting
risks from a
cedent and
accepts no
underwriting risk
directly from the
consumer.
b) Legal entity will
be classified as
Life, Non-life or
an Composite
insurer.
321.
CEA
Re-J3- cell F1
Development of systems will be necessary to ensure consistency in
the approach between ratings/agencies reported across both Assets
templates and Reinsurance templates.
1) Agree. There will be
a consistency check.
2) Further clarification:
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a) Agree;
Further clarification required:
We believe it is unclear which rating should be used. For
example, the same as for Counterparty default or is it optional? We
express preference to use the same rating as used for counterparty.
If more than one rating is available for a reinsurer, which one
would take precedence?
322.
CEA
Re-J3- cell G1
Please refer to RE – J3 – cell F1.
b) Companies can
choose any
rating agency or
even a reinsurer
which is not
rated; in
principle the
agency should
be changed only
in case the
rating agency
previously used
stops providing
the rating; in
any case the
same agency
and rating has to
be used
wherever
applicable in the
various
templates": the
information
throughout the
templates must
therefore be
consistent;
See also comment 321.
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323.
CEA
Re-J3- cell H1
Purpose of reporting by broker is not clear. Even in the case of
placement, the risk will be with the reinsurer and not with the broker.
We query if the template requires the specification of both the name
of the Broker and the Reinsurer or can the name of the reinsurer be
left out if the Broker is specified?
We need the
specification of the
name of the Broker, to
assess the counterparty
risk related to the
specific reinsurer, and
the name of the
reinsurer, to know to
which intermediary the
transfer of risk has
been outsourced.
324.
CEA
Re-J3- cell I1
Please refer to RE -J3 – cell H1.
See also comment 323.
325.
CEA
Re-J3- cell J1
Please refer to RE -J3 – cell H1.
See also comment 323.
326.
CEA
Re-J3- cell L1
Further guidance is required on completing this cell and whether this
should done be on a best estimate basis, the reinsurance recoveries
relating to claims provisions, cash flow without discounting, present
value of cash flows, i.e. including discounting effects.
1) See definition in
LOG file: Share of
the reinsurer in the
recoverables from
reinsurance
(including Finite Re
and SPV) before the
adjustment for
expected losses due
to the counterparty
default, in the best
estimate of the
claims provisions.
Amount must be in
line with the item of
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the same name
mentioned in
Template TP-E1
(Non-Life and Health
non-SLT Technical
Provisions).
327.
CEA
Re-J3- cell M1
Please refer to RE – J3 – cell L1.
See also comment 326.
328.
CEA
Re-J3- cell O1
Assumption that this number is equivalent to reinsurance debtors
may lead to the risk of double-counting, as reinsurance debtors are
included within the undertakings calculations for reinsurance
premiums and claims reserving.
1) Is the result of
claims paid by the
insurer but not yet
reimbursed by the
reinsurer +
commissions to be
paid by the
reinsurer + other
receivables minus
debts to the
reinsurer. Cash
deposits are
excluded and should
be considered as
guarantees
received. Total
amount must be
equal to the sum of
the balance sheet
items: Reinsurance
receivables and
Reinsurance
In the situation where amounts are due via a broker, not directly
from a reinsurer, we ask that EIOPA clarify how such amounts are to
be presented in this template.
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payables.
2) See additional
columns in
template.
329.
CEA
Re-J3- cell P1
Reporting this information will require some effort to develop the
appropriate systems and processes.
Further clarification required:
More detailed definitions are required for “Asset pledge” and
“financial guarantees” in order to better understand the differences
between the two
How are Letters of Credit allowed for? The assets are not
necessarily pledged but are contingent.
1) Without the
requested additional
information
collected data might
not be properly
processed and
therefore would not
be useful.
2) Clarification:
a) Assets pledged
are assets
pledged by
reinsurers for
ceded technical
provisions.
Financial
guarantees are
guarantees
received by the
undertaking
from the
reinsurer to
guarantee the
payment of the
liabilities due by
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the undertaking
(includes letter
of credit,
undrawn
committed
borrowing
facilities)
b) See a.
330.
331.
CEA
Re-J3- cell Q1
CEA
Re-J3- cell R1
We question whether parental guarantees given in support of
reinsurer subsidiaries should be included in this field?
Reporting this information will require some effort to develop the
appropriate systems and processes.
Further clarification required:
More detailed definitions are required for “Asset pledge” and
“financial guarantees” in order to better understand the differences
between the two
How are Letters of Credit allowed for? The assets are not
necessarily pledged but are contingent.
Financial guarantees
are guarantees received
by the undertaking from
the reinsurer to
guarantee the payment
of the liabilities due by
the undertaking
(includes letter of
credit, undrawn
committed borrowing
facilities).
1) Without the
requested additional
information
collected data might
not be properly
processed and
therefore would not
be useful.
2) Clarification:
a) Assets pledged
are assets
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pledged by
reinsurers for
ceded technical
provisions.
Financial
guarantees are
guarantees
received by the
undertaking
from the
reinsurer to
guarantee the
payment of the
liabilities due by
the undertaking
(includes letter
of credit,
undrawn
committed
borrowing
facilities)
b) See a.
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